Palantir Technologies stock (NASDAQ:PLTR) price surged 6% on Monday, March 24, following reports that the Trump administration might refrain from imposing sector-specific tariffs on April 2. [1]
This news sparked a broader rally in tech stocks, with the NASDAQ index climbing 2.3%. Do strong fundamentals mean it is Time To Buy META Stock At $620?
At its current level of $97, PLTR stock appears attractive yet volatile. We believe the company’s strong operating performance and financial condition offer little cause for fundamental concern, which contributes to its attractiveness. However, its extremely high valuation makes it particularly sensitive to negative developments.
Our analysis, comparing PLTR’s valuation to its operating performance and financial health across Growth, Profitability, Financial Stability, and Downturn Resilience, confirms its very strong underlying fundamentals, as discussed further below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
How Does Palantir Technologies’ Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, PLTR stock looks very expensive compared to the broader market.
- Palantir Technologies has a price-to-sales (P/S) ratio of 68.3 vs. a figure of 3.2 for the S&P 500
- Additionally, the company’s price-to-operating income (P/EBIT) ratio is 630.7 compared to 24.3 for S&P 500
- And, it has a price-to-earnings (P/E) ratio of 169.7 vs. the benchmark’s 24.3
How Have Palantir Technologies’ Revenues Grown Over Recent Years?
Palantir Technologies’ Revenues have grown considerably over recent years.
- Palantir Technologies has seen its top line grow at an average rate of 23.0% over the last 3 years (vs. increase of 6.3% for S&P 500)
- Its revenues have grown 28.8% from $2.2 Bil to $2.9 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
- Also, its quarterly revenues grew 36.0% to $828 Mil in the most recent quarter from $608 Mil a year ago (vs. 5.0% improvement for S&P 500)
How Profitable Is Palantir Technologies?
Palantir Technologies’ profit margins are much higher than most companies in the Trefis coverage universe.
Does Palantir Technologies Look Financially Stable?
Palantir Technologies’ balance sheet looks very strong.
- Palantir Technologies’ Debt figure was $239 Mil at the end of the most recent quarter, while its market capitalization is $223 Bil (as of 3/24/2025). This implies a very strong Debt-to-Equity Ratio of 0.1% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
- Cash (including cash equivalents) makes up $5.2 Bil of the $6.3 Bil in Total Assets for Palantir Technologies. This yields a very strong Cash-to-Assets Ratio of 82.5% (vs. 14.8% for S&P 500)
How Resilient Is PLTR Stock During A Downturn?
PLTR stock has seen an impact that was worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
- PLTR stock fell 67.6% from a high of $18.53 on 3 January 2022 to $6.00 on 27 December 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 31 July 2023
- Since then, the stock has increased to a high of $124.62 on 18 February 2025 and currently trades at around $97
Putting All The Pieces Together: What It Means For PLTR Stock
In summary, Palantir Technologies’ performance across the parameters detailed above are as follows:
• Growth: Extremely Strong
• Profitability: Very Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Weak
• Overall: Strong
Overall, we believe that PLTR is a tricky stock to buy, primarily due to its extremely high valuation, despite exhibiting attractive qualities alongside inherent volatility.
PLTR stock’s lofty valuations can also be attributed to its success with AI-driven tools and significant government contract wins over the last year. There is also optimism surrounding the Donald Trump-led Republican administration, which is expected to increase federal spending on national security and immigration, driving demand for Palantir’s software tools.
Not too happy about the volatile nature of PLTR stock? The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
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