Investors are frequently advised to put their emotions aside when buying or selling stocks. However, I believe the problem with Palantir Technologies (NYSE:PLTR) is that too many investors are caught up in their “feels.” That’s the only explanation I can think of for the rollercoaster ride that’s been PLTR stock since its direct listing.  

However, emotional investing leaves you with blind spots. In the case of Palantir, both bullish and bearish investors should be sure they’re seeing the whole picture while assessing PLTR stock. At this stage, investors should take a step back to see that both sides of the argument have points in their favor.

PLTR Stock: Not An Easy Business to Define 

Part of the problem for Palantir is the average investor’s understanding of its business. For those that don’t live in the world of “big data” (yours truly included), it can be difficult to have someone explain Palantir to you like you’re five.  

As a result, investors pay more attention to who the company does business with, and the largest “who” for Palantir is the federal government. 

Now, I’ve been clear in past articles that the company is — and has been — equally likely to take money from Republican or Democratic administrations. But politics makes strange bedfellows. As Josh Enomoto pointed out, the company’s agnostic approach leaves room for criticism on both sides of the ideological spectrum.  

What the Bulls are Missing 

Palantir bulls have been overwhelmingly devoted to the company’s growth narrative. However, this approach ignores some red flags. For one thing, the cost of acquiring new customers is high. Vandita Jadeja wrote that Palantir has made great progress on this front to the tune of $169 million.   

Many of their new customers exist in the government space. To be fair, these customers tend to be sticky. And if you take your emotions out of the investment process, it doesn’t really matter where the revenue comes from. However, it still serves as a reminder that, while Palantir’s valuation suggests it’s already arrived, its customer base presents a different reality.

It’s also okay to shudder and wince at the amount of money being paid in stock compensation. Will Ashworth noted that Palantir’s CEO and co-founder Alex Karp was paid $1.1 billion in cash and stock compensation in 2020. That was nearly 5% of the company’s revenue for the year.  

What the Bears Are Missing 

There are two sides to every story, and the bears are overlooking some compelling arguments as well. Can I interest anyone in stocks from companies that have positive — and growing — free cash flow (FCF)? If so, then you should take a closer look at PLTR stock. You should also read what Mark Hake has to say about his forecast for the company’s FCF.  

If FCF isn’t enough for you, how about adjusted gross margins? In the third quarter of 2020, Palantir’s adjusted gross margin was 81%. In Q1 of this year, it went up to 83%. As I mentioned earlier, it will cost Palantir money to add new clients. But with margins like that, the company has some hefty pricing power to bring to the table.  

Plus, the bears are ignoring the fact that Palantir is, as Luke Lango writes, “the most technologically advanced data analytics platform provider in the world.” This would justify the company’s premium valuation since it’s only scratching the surface of its potential market.  

PLTR Stock Needs to Show Me More 

When you’re fortunate enough to write about a range of stocks, you’re going to have some hits and misses. With Palantir, I’ve chosen to play it down the middle. And while that’s not a popular place to be in our polarized culture, it’s served me well.  

I tend to fall into the bullish camp, but I’ll acknowledge that I want to see more before I buy into the company’s valuation. I haven’t owned PLTR stock yet, and I’m likely to wait until there’s a little more clarity on the company’s revenue growth. 

That’s not an emotional decision, just a rational one — for now.  

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On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.