Palantir: The Stock Is Richly Valued With a Forward P/S Multiple of Over 40x, but Is the Growth Story Still Worth Buying Into?
Palantir stock is not cheap, but its growth potential remains tantalizing.
Overview
Palantir Technologies (NASDAQ: PLTR) is a stock that has greatly divided investors over the years. The biggest reason for this is its valuation, as the stock trades at a forward price-to-sales (P/S) multiple of around 41 times 2026 analyst estimates and a forward price-to-earnings ratio (P/E) of nearly 90 times. Despite those high valuation metrics, though, the stock looks like it could be a top stock to own for the long term.
Top growth stocks rarely trade cheaply, and Palantir has proven to have one of the best growth stories for a large-cap stock not involved in the artificial intelligence (AI) infrastructure boom. The company has seen its revenue growth accelerate for 11 consecutive quarters, with growth of 85% in the first quarter. Meanwhile, its growth is being led by a combination of new customer additions and rapid expansion from existing customers.
Details
What makes Palantir special is its unique solution, which is becoming an integral part of the AI ecosystem. Instead of trying to build the next great AI model, Palantir turned to its roots in data gathering and analytics to develop an application layer that makes AI more useful for enterprises in the real world.
Source
Originally published at www.fool.com.