Why Innodata’s new Palantir initiative matters to investors
Innodata (INOD) is used to provide training data and data engineering services to Palantir Technologies, supporting an AI platform that analyzes complex rodeo video and sensor data to derive performance metrics.
This new customer engagement runs parallel to Innodata’s existing Data Engineering segment and comes as the company prepares to report its fourth quarter and full-year 2025 results on February 26, 2026, with a post-market release and investor conference call scheduled.
Check out our latest analysis for Innodata.
On the back of this new Palantir initiative, Innodata’s stock price has been volatile lately, with a 30-day stock return of -26.75% compared to a daily stock return of 9.35%, and three-year total shareholder returns that are impressive, indicating that long-term momentum is building over time.
If you’re interested in this AI data story, now might be a good time to check out our 27 AI Small-Cap Stock Screener to see what else is moving in the space.
Innodata is trading at $47.59 compared to analysts’ price target of $93.75, and the recent share price decline is in line with its very large three-year total return. This begs the question, is there still an entry point here, or is the market already pricing in future growth?
Most popular story: 49.2% are underrated
Innodata’s last closing price was $47.59 compared to its widely supported fair value of $93.75, and the current price is well below that estimate.
Increasing the adoption of AI across industries requires curated, high-quality datasets. Additionally, Innodata’s role evolving from just a data provider to a strategic partner (having a “seat at the table” with its clients’ data scientists) will support premium pricing, term contracts, and market share gains, potentially positively impacting both revenue stability and bottom line.
Read the whole story.
Want to know what kind of revenue runway, margin profile, and future revenue multiples are built into that nearly 2x fair value? The core story relies heavily on rapid revenue growth, thin but still healthy profit margins, and strong revenue multiples far above the typical professional services name. Are you curious about how these factors will come together over the next few years and what has to go right to rack up that $93.75 number? The full explanation explains the exact assumptions step-by-step.
Result: Fair value $93.75 (undervalued)
Read the full explanation to understand what’s behind the predictions.
However, these fair value expectations remain dependent on the concentration of large tech customers and rising costs. Contract setbacks or overruns could quickly overturn the bullish narrative.
Find out about the key risks to this Innodata story.
Another angle on valuation: rich on earnings multiples
These fair value stories exist in tandem with signals that are quite different from earnings multiples. Innodata has a P/E ratio of 45.1x, compared to a P/E ratio of 21.5x for the U.S. Professional Services industry and an average of 23.1x for its peers, giving it a fair multiple of 27.7x.
To put it simply, current prices reflect a much stronger outlook than the industry and peers, and are well above the fair ratios the market is likely to be heading over time. If sentiment cools or expectations are reset, how much room does the gap have to narrow?
See what the numbers say about this price. Please check the rating breakdown.
Build your own Innodata narrative
If you look at the numbers and come to a different conclusion, or want to test your own view using the same data, you can create a custom Innodata story in minutes and see how your paper stacks up. Do it your way.
A great starting point for Innodata Research is our analysis highlighting 3 key benefits and 2 key warning signs that could influence your investment decision.
Looking for more investment ideas?
If Innodata has raised new questions for you, now is the time to broaden your horizons and test your ideas with a list of some focused stock picks.
This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
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