1 hour ago
3
David Jagielski, CPA, The Motley Fool
Mon, April 13, 2026 astatine 12:50 PM CDT 3 min read
Investors should beryllium cautious erstwhile analyzing a stock, looking beyond what absorption wants to absorption on. Growth is important, but truthful excessively are beardown net numbers. However, it's the excitement astir top-line maturation that tin sometimes nonstop a banal skyrocketing to egregious levels.
Palantir Technologies (NASDAQ: PLTR) is an fantabulous illustration of that. The concern is increasing rapidly, and CEO Alex Karp wastes nary accidental to punctual investors of the company's show and the occurrence of its artificial quality (AI) platform, which remains successful precocious demand. But portion galore of its metrics look incredible, there's 1 precise important 1 that falls short.
Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected the 1 little-known company, called an "Indispensable Monopoly" providing the captious exertion Nvidia and Intel some need. Continue »
Palantir is increasing astatine an incredibly accelerated rate, with gross up 70% successful the company's astir caller 4th (which covered the past 3 months of 2025). On $1.4 cardinal successful revenue, its net were besides reasonably strong, coming successful astatine $609 million, for a 43% nett margin. Its CEO besides touts its Rule of 40 score, which combines the company's maturation complaint and adjusted margin. At 127%, helium believes Palantir is successful a league of its own.
One fig that isn't truthful great, however, is its net per stock (EPS). Its diluted EPS for the past twelvemonth was conscionable $0.63. This makes the stock, which trades astatine astir $130 today, look incredibly expensive, arsenic it means that Palantir trades astatine much than 200 times its trailing earnings.
The institution relies heavy connected stock-based compensation, and its stock number has been rising successful caller years. The higher the stock number successful narration to earnings, the little the EPS figure. If the institution were to bargain backmost shares astatine a meaningful rate, that would amended the metric, bring down the net multiple, and efficaciously marque the banal a amended bargain for investors.
This twelvemonth has been a pugnacious 1 for high-priced tech stocks, and Palantir is nary exception. The banal is down 25% and is astir 36% distant from its 52-week precocious of $207.52. Investors tin take to disregard valuations, but a correction whitethorn beryllium inevitable erstwhile buying specified a highly valued stock. Even astatine its existent valuation, the banal inactive looks incredibly costly fixed its EPS, which is wherefore I wouldn't beryllium amazed to spot Palantir's banal autumn adjacent further arsenic the twelvemonth goes on.
English (CA) · 
English (US) · 
Spanish (MX) ·