'Pharma Bro' Martin Shkreli Defends Palantir's Valuation Amid 24% Surge, Says AI Firm's Cash Flow Justifies 'Expensive' Price
Martin Shkreli, the former hedge fund manager known as “Pharma Bro,” defended Palantir Technologies Inc.‘s (NYSE:PLTR) valuation on Tuesday amid the company’s surging stock price, projecting substantial cash flow growth for the data analytics firm through 2025.
What Happened: Shkreli, writing on X, stated that Palantir’s cash flow from operations (CFFO) should reach $1.8 billion in 2025 and potentially $2.7 billion by 2026. “It’s not as expensive as it looks,” he wrote, citing an 83x CFFO/FCF multiple for what he described as a “50% revenue grower with a lot of expense slack.”
His comments came as Palantir’s stock jumped 23.90% following strong fourth-quarter results that exceeded analyst expectations. The company reported revenue of $827.52 million, beating estimates of $775.91 million, with earnings per share of 14 cents topping forecasts of 11 cents.
Palantir boasts a market capitalization of $236.42 billion, with a price-to-earnings ratio of 525.32. Despite the strong rally, Palantir’s Relative Strength Index over a 14-day period stands at 80.36, suggesting the stock may be approaching overbought territory.
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Why It Matters: The AI software company’s performance was particularly robust in its U.S. operations, with commercial revenue surging 64% year-over-year to $214 million and government revenue rising 45% to $343 million. Customer count grew 43% compared to the previous year.
CEO Alex Karp emphasized the company’s position in the AI revolution, stating in a letter to shareholders, “We are still in the earliest stages, the beginning of the first act, of a revolution that will play out over years and decades.”
Analysts have responded positively, with several firms raising their price targets. Bank of America Securities maintained a Buy rating while lifting its target to $125, and Morgan Stanley upgraded the stock to Equal-Weight with a new $95 target.
Palantir forecasts adjusted free cash flow between $1.5 billion and $1.7 billion for the year.
Shkreli’s analysis comes after serving time for securities fraud related to his previous hedge fund management activities. While controversial, his background includes experience in financial analysis and pharmaceutical industry investments before his 2017 conviction.
Price Action: Palantir closed at $103.83 on Tuesday, marking a 23.99% surge for the day. However, in after-hours trading, it edged down 0.90% to $102.90, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.