Where Will Palantir Stock Be in 5 Years? | Shocking Palantir Stock Prediction! PLTR Stock Analysis

hey everyone in this video I'm going to look at where I think palen's stock price could go 5 years from now I'm going to look at several interesting assumptions and estimates and forecasts to make this stock price prediction so without further Ado let's jump right into it and let's take a look at this interesting AI stock I want to thank the mle fo for sponsoring this video visit fool.com parev for the 10 best stocks to buy now so one of the numbers I'm going to need is palente next year 2025 earnings per share estimate and according to the analyst on Wall Street that are following paler stock they think the company can deliver 40 cents earnings per share next year in 2025 interestingly that forecast is up from 35 cents just 90 days ago and 39 cents just 30 days ago so analysts are revising earnings per share forecast for paler stock higher as the company is demonstrating better than expected earnings per share forecasts for the current and next year I'm also going to need paler next 5 years earnings per share estimate and according to those same analyst on Wall Street that are following paler stock they think the company can deliver 85% earnings per share growth annually over the next 5 years that's a robust earnings per share forecast I'm not sure how realistic that is for a company to grow 85% per year for 5 years straight that's a pretty remarkable able rate of increase in earnings per share nevertheless these are the analysts that are closest to paler stock the ones that are following paler stock closely and this is what they forecast this is what they believe paler will deliver in earnings per share growth over the next 5 years of course paler is one of the leading companies in artificial intelligence and the AI industry is growing robustly at a rate of return expected to increase from 200 billion in 2023 to over .8 trillion in spending by 2030 so palente here is in a prime position to benefit from that robustly growing industry so you never know it looks like this is what analysts on Wall Street are expecting if I was to bet on a over and under I would take the under on this 85.19% but I'm going to stick with the analyst on Wall Street and use that number as my forecasted earnings per share growth rate I'm also going to need palen's current share price right now is trading at $22.69 per share interestingly I rated paler stock as a buy coming into 2024 around late December I recommended paler stock as a buy and you can see the stock price has exploded in 2024 year to date 12 days ago however I told investors it was a prudent time to take profits around March 20th over here I recommended investors take profits around 232 $24 per share and the stock has flatlined since that going downward a little bit it was in this video here titled is it finally time to take profits in paler stock where I published it 12 days ago you can go and watch this video if you're interested as to my reasoning for suggesting it's good time to take profits in paler stock so those are the numbers I'm going to need I'm also going to need paler forward price to earnings ratio right now is trading at a forward PE of 57.7 near the most expensive this stock has been in the last year this is right up there near the most expensive it's been and this was partly the reasoning why I explained it was a good time to take profits in paler stock despite the fact the company's prospects look excellent the valuation is near the most expensive it's been so it's already incorporating those excellent prospects into the stock price here at the current valuation that's why I said if you were in it to start the year and you were up so much already it wasn't such a bad idea to book some profits in paler so now that we've got the numbers that we need we can go ahead and start our stock price forecast first let me draw your attention here at the 40 cents earnings per share forecast for palente tier in 2030 in 2025 I'm sorry let me fix this it was a little bit wrong there it was saying 4 cents instead of 40 cents so if we look at palen's earnings per share for 2025 it's expected to come in at 40 cents if the company's earnings grows at 85% as Wall Street expects by the year 2030 palente earnings per share could be $867 and if we apply the 57.8 forward price to earnings multiple on that $867 earnings per share for 2030 paler stock price could be a whopping $51 per share admittedly that's a scenario that I don't think is very likely more likely I think is like I mentioned at the beginning of the video paler earnings per share growth rate is not as large and the PE forward multiple is not as high so if we look at several scenarios if the forward PE Falls to 50 the stock price could be 433 at 45 the stock price could be 390 at 35 the stock price could be $33 per share and if you remember the stock price is only $22 per share right now so those are pretty remarkable forecasts for where paler stock price could be 5 years from now I think these scenarios are too optimistic I think the 85% growth rate is too optimistic for Palante here over the next 5 years so I'm going to cut this earnings per share growth rate in half and say that it's it's going to grow at 42.5% for the next 5 years I'm also going to say that the forward price to earnings is going to fall it's going to fall closer to 35 so if I was to provide my best guess for where I think paler stock price could be it's going to be much lower than where it is in these forecast I think the stock price could fall in the range of a forward PE of 30 to perhaps a forward PE of 35 which suggests the stock price could be in the range of $70 per share to $82 per share in 5 years now that would still be a robust rate of return considering that paler stock price is just $22 per share right now that suggests that the stock price could more than triple in the next 5 years but again these are using very op optimistic forecasts here for earnings per share growth of 42.5% for 5 years straight that's a difficult feat to accomplish for any company so if these earnings per share come in as Wall Street analysts expect paler stock price could explode paler stock price could explode the big question mark is the earnings per share that's where I have my biggest concern with palente here can its earnings per share grow at the rate that Wall Street analysts that are following paler stock expected to my guess is that it won't at least it won't grow at the over 80% That Wall Street has it but even if it doesn't even if it only grows at 40% it still suggest the stock price that's going to be higher from where it is today but if the growth rate would be much lower let's say it grows at only 20% over the next 5 years that's where the stock price increases are not as robust that's where you have the stock price at the most tripling from where it is today again I don't think paler stock investors would be disappointed in that rate of return although I will say that paler stock is one that is above average risk so you should be looking for an above average rate of return on paler stock given that it comes with significantly higher risk than the average stock so you should expect or you should require a higher rate of return and that's what I've incorporated into this price Target here for paler stock before I let you go let me tell you about the greatest deal on YouTube with just a click of a button you can get free financial analysis from a professor with Decades of investing experience so what are you waiting for hit that subscribe button and I'll see you again soon

Channel: Parkev Tatevosian, CFA

Views: 12,221

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Id: vdHp8CPfTxo

Length: 8min 54sec (534 seconds)

Published: Fri Apr 05 2024