At today's price, Palantir's stock is pricing in somewhere between 34% and 48% annual free-cash-flow growth for the next ten years, depending on which recent period is used as the starting base. Over the past five years, the company's actual FCF growth averaged 59.9% a year.
At its current price, PLTR implies 34%–48% annual FCF growth for the next 10 years, depending on the FCF base used (discounted at 10%).
Palantir's actual 5-year FCF growth has averaged 59.9% a year.
Required growth vs. historical growth
Required growth from the reverse DCF below. Historical CAGRs (2021→2025) from 10-K FY2025 (p.86, p.89) and 10-K FY2023 (p.86, p.89).
Sensitivity: FCF base × discount rate
| FCF base | WACC 8% | WACC 10% (base) | WACC 12% |
|---|---|---|---|
| 3-year average ($1.31B) | 41.2% | 47.7% | 53.3% |
| Trailing-twelve-month (~$3.36B) | 27.9% | 33.6% | 38.6% |
Given Palantir's high-growth, high-volatility profile, some would argue a 12% discount rate is more appropriate than 10% — in that case, use the right-hand column above.
What would move this number
- The choice of FCF base matters more here than almost anywhere else. Palantir's FCF roughly doubled each year — $697M (2023) → $1,141M (2024) → $2,101M (2025) — and H1 2026 FCF alone ($2.09B) is already close to matching all of FY2025. A three-year average understates this recent momentum; trailing-twelve-month fully credits it. Which is the "right" base depends on whether this growth is structural or temporary.
- A 12% discount rate raises the required growth rate to 53.3% (3-year average base) or 38.6% (TTM base).
- Palantir's large net-cash position (~$9.4B) is subtracted from market cap in this model, which lowers the required growth rate relative to a company carrying net debt.
Show your work
Inputs, sources, model assumptions, and the calculation
- Share price$172.55 — stockanalysis.com, Aug 17, 2026, 4:00pm ET close
- Diluted shares outstanding2,568.69M — 10-Q Q2 FY2026, quarterly diluted weighted-average shares (as of Jun 30, 2026)
- Market cap$443.23B — price × diluted shares (calculated)
- Net debt-$9.41B (net cash) — 10-Q Q2 FY2026 balance sheet (Jun 30, 2026): cash $2.030B + marketable securities $7.379B, zero interest-bearing debt
- Enterprise value$433.82B — market cap + net debt (calculated)
- FCF, 3-year average$1.31B — 2023–2025 average (operating cash flow minus capex), 10-K FY2025 p.89 / 10-K FY2023 p.89
- FCF, trailing-twelve-month$3.36B — FY2025 FCF plus H1 2026 FCF minus H1 2025 FCF, 10-K FY2025 p.89 / 10-Q Q2 FY2026 p.10
- Discount rate (WACC)8% / 10% / 12% tested
- Terminal growth rate2.5% — long-run GDP-level assumption
Normalization note: trailing-twelve-month FCF ($3.36B) sits 155% above the three-year average ($1.31B) — far beyond the usual ±40% threshold that would normally call for using the three-year average instead. But because this reflects more than two years of structural acceleration (Rule of 40 rising from 46 to 155) rather than a one-time item, both bases are shown side by side here rather than defaulting to one.
Model: a two-stage reverse DCF — free cash flow grows at rate g (solved for) for 10 years, then at a 2.5% terminal rate thereafter, solved by bisection for the value of g that equates present value to today's enterprise value.
The fine print
- Change the discount rate, the FCF base, the projection window, or the terminal growth rate, and the answer moves substantially — as shown, the required rate spans roughly 28% to 53% across the combinations tested here.
- A reverse DCF shows what the market currently expects — it does not say what the stock is "worth."
- Whether 34–48% growth is realistic depends on Palantir's business model, competitive position, and government dependence — not on this math alone.
- Any investment decision, and its outcome, is your own responsibility.
Frequently asked questions
What growth rate does PLTR's stock price assume?
At today's price, Palantir's stock is pricing in somewhere between 34% and 48% annual free-cash-flow growth for the next ten years, depending on which recent period is used as the starting base.
How does that compare to Palantir's actual growth?
Over the past five years, Palantir's actual free-cash-flow growth averaged 59.9% a year — above even the high end of the 34–48% range the price requires, though Palantir's growth has also been decelerating from very high levels.
What share price was used for this analysis?
This analysis used $172.55, as of Aug 17, 2026.