What happens when an unstoppable stock meets an immovable short? Well, we might find out soon enough as Andrew Left's Citron Research has just doubled down on its short thesis vis-à-vis Palantir.
Last week, while speaking on Fox Business, Citron Research's Andrew Left had declared that he was now short on Palantir, and that he added to his bearish bet on the stock in the aftermath of Palantir's latest quarterly earnings release, going so far as to label his negative thesis on the stock as "obvious.
Today, Left has doubled down on his bearish conviction in relation to Palantir by pegging a $40 "generous" price target on the high-flying stock, which implies a downside potential of around 77 percent relative to Palantir's current stock price of $173.64.
Interestingly, Left uses OpenAI's price-to-sales multiple of around 17x as the basis for his depressed stock price target for Palantir.
To wit, OpenAI currently commands a valuation of around $500 billion on $29.6 billion in projected sales for 2026, which yields a price-to-sales multiple of 16.89x.
By applying this 17x multiple to Palantir's 2026 consensus revenue estimate of $5.6 billion, Citron Research computes a $95.2 billion theoretical valuation estimate for the high-flying stock, which equates to a $40 per share price target.
For the benefit of those who might not be aware, Palantir currently has two specialized platforms, with Gotham geared towards the data analytics needs of various government agencies, and Foundry enabling the agglomeration and analysis of data for enterprises. Palantir has also developed its bespoke Artificial Intelligence Platform (AIP), which allows for the integration of various LLMs and other types of generative AI within an organization's operational structure via AI-powered applications and agents.
Palantir expects its commercial business to haul in over $1.302 billion in FY 2025, as per the company's guidance, representing a year-over-year growth rate of at least 85 percent. Even so, Alex Karp - who is Palantir's CEO - wants this run-rate to grow by 10x over the next five years, which would imply a CAGR of 58 percent, as per the calculations by UBS.
Do note that Palantir currently expects $4.142 - $4.152 billion in revenue for its FY 2025. As such, the Bloomberg consensus 2026 revenue estimate of $5.6 billion implies a healthy year-over-year revenue growth rate of 35 percent, based on the upper bound of the 2025 guidance range.
Nonetheless, Citron Research's $40 price target on Palantir serves as a stark illustration of just how untethered the stock's valuation has become from any reasonable grounding in the tenets of fundamental analysis.
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