Palantir Stock Drops After Hours Despite Positive Earnings Report

Palantir stock dropped more than 4% in extended trading after a heated rally, despite beating third-quarter expectations, as analysts argue the company is overvalued, Rian Howlett reported for Yahoo Finance.

Investors have sent the shares up more than 150% so far this year. (Photo: Palantir)

Palantir raised its annual revenue outlook to $4.4 billion and surpassed analyst estimates for third-quarter sales, though shares declined in after-hours trading on concerns about the company’s lofty valuation following a record run-up.

Investors have sent the shares up more than 150% so far this year, closing Monday at a record $207.18.

The company had a price-to-sales ratio of 85 as of Friday — the highest in the S&P 500 Index.

“All these numbers are completely disengaged from fundamentals,” D.A. Davidson’s Gil Luria said in an interview with Bloomberg Television.

“This is a company with a $4 billion run rate that’s growing 63%. There’s nothing even remotely close to that, which is how we got to the situation where the valuation is at unprecedented levels.”