Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Palantir Technologies Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 60.8% to 50.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 63, DPO 27, DIO 60). At a 9.3% WACC with mid-year discounting, the terminal value (131% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 21.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $5.77 per share, suggesting PLTR is overvalued by 96.3% at the current price of $154.96.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 174 | 250 | 361 | 743 | 1,117 | 1,145 |
| (−) Net Interest | 9 | 13 | 18 | 37 | 56 | 57 |
| (+) D&A | 23 | 34 | 46 | 72 | 128 | 131 |
| EBITDA | 206 | 297 | 425 | 852 | 1,301 | 1,334 |
| (−) Tax | 8 | 12 | 17 | 35 | 52 | — |
| (−) CapEx | 69 | 99 | 143 | 295 | 443 | — |
| (−) ΔWC | 338 | 599 | 877 | 3,009 | 2,949 | — |
| Free Cash Flow (FCF) | -210 | -413 | -612 | -2,487 | -2,143 | — |
| Peers' EBITDA Multiple | 21.2x | |||||
| Terminal Value | 28,231 | |||||
| WACC / Discount Rate | 9.31% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -201 | -362 | -490 | -1,821 | -1,436 | 18,094 |
| Enterprise Value | 13,784 | |||||
| Projection Period | -4,309 | -31.3% | ||||
| Terminal Value | 18,094 | 131.3% | ||||
| (−) Current Net Debt | (1,011) | |||||
| Equity Value | 14,795 | |||||
| (÷) Outstanding Shares | 2565M | |||||
| Fair Price | $6 | -96.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 17.2x | 19.2x | 21.2x | 23.2x | 25.2x |
|---|---|---|---|---|---|
| 7.3% | $5 | $6 | $6 | $7 | $8 |
| 8.3% | $5 | $5 | $6 | $7 | $7 |
| 9.3% | $4 | $5 | $6 | $6 | $7 |
| 10.3% | $4 | $5 | $6 | $6 | $7 |
| 11.3% | $4 | $5 | $5 | $6 | $6 |
Current price: $154.96. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.