Data analytics company Palantir Technologies (Palantir Technologies Stock Quote, Chart, News NYSE:PLTR) may have a bright future ahead of it but Palantir\u2019s way forward is just too cloudy to warrant your investment dollars at the moment. So says Gordon Reid, president and CEO of Goodreid Investment Counsel, who thinks the stock\u2019s valuation has gotten a little out of hand. Enterprise software and big data company Palantir debuted on the NYSE in late September and so far has been a sensation for shareholders who have seen its share price rise from $10.00 at the outset to now around $27 and change. (All figures in US dollars.) The company is showing rising demand for its products, having closed on 15 deals each worth $5 million or more over its latest quarter, including a $91-million contract with the US Army, a $36-million one with the US National Institutes of Health and a $300-million contract renewal an aerospace customer. Last week, Palantir announced a deal with the US Food and Drug Administration worth a reported $44.4 million. The contract will see Palantir software integrate and analyze data for the FDA\u2019s Center for Drug Evaluation and Research and its Oncology Center of Excellence and is just one of many US government contracts announced by Palantir in recent years. \u201cThe demand for our software has increased steadily over the past year in the face of significant economic and geopolitical uncertainty in the United States and abroad,\u201d said Palantir in its third quarter press release in November. The company\u2019s first quarterly report since going public, Palantir\u2019s Q3 featured $289.4 million in revenue, up 52 per cent year-over-year, a net loss of $853 million compared to a loss of $139.9 million a year earlier and net loss per diluted share of $0.94 compared to a loss of $0.24 for Q3 2019. Analysts had been expected revenue of $279.4 million. But even with all the positive news and potential stock catalysts, Reid said there\u2019s more risk with PLTR than is worth the gamble. \u201cMost of their business is with the US government, and this is a nascent area,\u201d said Reid, speaking on BNN Bloomberg on Wednesday. \u201cCertainly, Palantir could grow into a very meaningful company but the jury\u2019s out on this type of thing.\u201d \u201cThere are quite a number of new companies and new technologies and that\u2019s very good but from an investment standpoint and after all my years in the business I value some degree of certainty,\u201d he said. \u201cBefore we dedicate and allocate our clients\u2019 funds to investments we want to have some clarity and visibility, and with companies like Palantir they\u2019ve been priced very highly for an assumed successful road. But that\u2019s less than guaranteed.\u201d \u201cSo, we would stand on the sidelines with Palantir,\u201d Reid said. \u201cIf you look at the valuation, they\u2019ve yet to make any money on the bottom line and they\u2019re trading at I think about 15x sales, a pretty extreme valuation that they would have to grow into. They might, but I\u2019ll take a little more certainty and even be willing to pay a little higher price for that certainty.\u201d Reid has some agreement from Mark Tepper of Strategic Wealth Partners who recently spoke on CNBC about Palantir, saying the stock should likely get a Hold rating after all the share price appreciation over the last two-and-a-half months. Tepper also ha concerns about the company\u2019s growth prospects. \u201cThere\u2019s no doubt these guys have a great niche \u2014 surveillance, defense, cybersecurity \u2014 that\u2019s modern warfare as we know it,\u201d Tepper said, on CNBC\u2019s Trading Nation on December 9. \u201cBut I question how much they can really expand outside of their government customers. What is their outside of the government? I\u2019m guessing that at this point is probably not that big.\u201d Earlier this month, Morgan Stanley downgraded its rating on Palantir from \u201cEqual Weight\u201d to \u201cUnderweight,\u201d saying the stock is trading at a significant premium to its peer group. Analyst Keith Weiss increased his target from $15 to $17, which would have represented a one-year return of negative 24 per cent. \u201cWhile strong 3Q20 results highlighting sustained momentum in the government vertical, accelerating growth in the enterprise and record margins of +25 per cent represented a slight fundamental uptick versus initial expectations \u2013 we believe much of incremental move since 3Q20 results (shares +75 per cent over the past 2.5 weeks) are likely related to factors outside of fundamentals, including strong retail long-interest squeezing strong institutional short-interest,\u201d Morgan Stanley analysts wrote. With its third quarter report, Palantir said its commercial business saw significant momentum over the Q3, along with international expansion efforts, particularly in Asia where the company secured a strategic partnership with health insurer Sompo Holdings. With the third quarter report, Palantir increased its full-year 2020 revenue guidance to between $1.070 billion and $1.072 billion, representing a projected 43-per-cent year-over-year increase.