'Wait for a Big Pullback,' Top Investor Says on Palantir Stock

Palantir (NASDAQ:PLTR) stock has been on a roller coaster ride since its early-November earnings release, and the price action hasn't quite matched the numbers. Despite a stellar Q3 that beat revenue and EPS estimates and came with raised guidance, the stock slid as investors fixated on valuation and locked in profits.Claim 50% Off TipRanks Premium and Invest with Confidence Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential In a sense, this move is understandable. By almost any conventional yardstick, PLTR screens as an expensive stock, and with a price-to-earnings multiple hovering around 430x and a price-to-sales multiple near 60x, expectations for future growth are already doing a lot of heavy lifting in the share price. Management, however, sees the situation very differently. CEO Alex Karp has brushed aside valuation worries, arguing that Palantir's pace and quality of growth simply don't fit neatly into traditional metrics, while taking aim at what he calls the "chattering class" for missing the bigger picture. Still, skepticism around the stock isn't the same as skepticism around the business. Even many critics concede that Palantir's fundamentals are compelling – they're just unwilling to pay up at current levels. That camp includes top investor Geoffrey Seiler, who has made it clear he'd be more than happy to load up on PLTR shares, provided the price comes back down to earth. "I'd prefer to keep Palantir's stock on the radar and be a buyer if the stock ever does see a big pullback," explains the 5-star investor, who is among the top 2% of stock pros covered by TipRanks. Seiler acknowledges the many bells and whistles that have combined to make Palantir a clear "AI winner." The investor cites the company's many exceptional figures from last quarter, including 63% year-over-year revenue growth and net revenue retention of 134%, among others. Moreover, Seiler is ready to declare that Palantir could become "one of the largest and most important AI companies in the world." And yet, the investor just can't get beyond PLTR's valuation metrics. Seiler notes that many of the biggest companies in the world saw massive drops in value at some point, and the same script could be coming for Palantir. "Given its lofty valuation and huge share-price run over the past two years, I would not be buying Palantir stock at these levels," sums up Seiler. (To watch Geoffrey Seiler's track record, click here) Wall Street is reading from the same playbook. With 3 Buys, 11 Holds, and 2 Sells, PLTR carries a consensus Hold (i.e., Neutral) rating. Its 12-month average price target of $187.87 implies minimal movement going forward. (See PLTR stock forecast)