Palantir, Inc. (PLTR) stock is potentially undervalued by almost 20% based on analysts’ revenue forecasts, with a 48% FCF margin estimate and 0.52% FCF yield. PLTR is currently trading at $181.07, up from a recent low of $153.11. Analysts predict 2026 revenue to rise to $5.61 billion, supporting higher FCF projections.

Palantir’s Q2 adjusted FCF margin was an impressive 56.7%, with a trailing 12-month unadjusted FCF margin of 49.7%. The company raised its revenue and adjusted FCF estimates for this year to $4.15 billion and $2.0 billion, respectively, at the high end. Analysts now forecast a 34.5% increase in FCF for 2026.

Currently, PLTR trades at a FCF multiple of over 215 times, with a FCF yield of less than 0.5%. To be conservative, a 0.52% FCF yield would value PLTR stock almost 20% higher than its current price. This indicates a potential upside for investors in the coming year based on strong FCF projections.

Investors can consider selling short out-of-the-money puts on PLTR to set a lower buy-in point and earn additional income. By entering put contracts with a midpoint premium of $4.15 for an exercise price of $165.00 expiring Oct. 24, investors can make an immediate yield of over 2.5% and set a breakeven price of $160.85, 11.16% below the current price.

Selling short out-of-the-money puts on PLTR can provide income and potential capital gains if the stock price remains stable or rises. By repeating this strategy over several months, investors could see a return of over 15%, similar to investing directly in PLTR and achieving the expected upside target. This approach offers a conservative way to potentially benefit from PLTR’s valuation upside.

Read more at Yahoo Finance: Palantir Stock Could Still Be 20% Undervalued as Analysts Raise Their Forecasts