Guided 2026 sales of $8.16 billion at $199 still imply an extreme multiple. I model 38 percent 2027 growth and 72 times earnings, which lands at $134.
Key points
- $8.16 billion FY2026 revenue is the guided midpoint, 82 percent above $4.48 billion in 2025.
- 47.1 percent GAAP operating margin in Q2 2026, with free cash flow at 62 percent of sales.
- 107 times my $1.86 FY2027 EPS is what $198.77 requires on 2.60 billion diluted shares.
The call
The price requires roughly 50 percent revenue growth in 2027 and an 85-times multiple on $2.28 of earnings just to sit still. That is $517 billion of diluted value against $8.16 billion of guided sales.
I believe growth slows toward 38 percent as the base hits $11.3 billion, GAAP net margin holds near 43 percent, and the multiple compresses to 72 times $1.86 of FY2027 EPS. Commercial net-dollar retention of 157 percent is excellent, but remaining performance obligations of $4.9 billion cover only about seven months of guided sales.
Revenue history and my 2027 forecast ($ billions)- Reported / guided
- My FY27 estimate
SEC XBRL through Q2 2026; FY2026 midpoint guidance; my 38% FY2027 estimate
Valuation
| Item | Figure |
|---|
| FY2026 revenue (guidance midpoint) | $8.16 billion |
| My FY2027 revenue (38% growth) | $11.25 billion |
| My FY2027 net income (43% margin) | $4.84 billion |
| Diluted shares | 2.60 billion |
| My FY2027 EPS | $1.86 |
| Multiple | 72 times |
| 12-month target | $134 |
Seventy-two times is still a premium software multiple for 35-plus percent growth. Asymmetry is poor: a 50 percent growth print might hold $180, while a 30 percent print with a 50-times multiple is near $80. That is why the rating is strong sell, not hold.
Bridge from $199 to $134 targetMy FY27 EPS of $1.86 at 72 times versus 107 times implied today
Risks
- U.S. commercial TCV of $2.13 billion in one quarter could keep compounding above 50 percent.
- Government awards (Army TITAN and Maven) could lift remaining performance obligations faster than I model.
- A deferred-tax release or recurring investment gains could lift GAAP EPS without better operations.
What would change my mind
Four consecutive quarters of 50 percent-plus revenue growth with remaining performance obligations above $8 billion.