Palantir (NASDAQ: PLTT) Actions have been a brilliant investment in recent years. Over the past 12 months, the price of a technology company has increased by about 460%, while in the last 24 months it increased by almost 1150%.

For centuries I had this enhance on the observation list, but I never pulled out the trigger. Is it time to get to the action now? Let’s talk.

What’s in this company?

Palantir specializes in sophisticated software based on artificial intelligence (AI), which has been designed to aid customers exploit their data to obtain a competitive advantage. Established in 2003, he had many successes serving government agencies, such as the FBI and the CIA. Recently, however, it moves to the corporate space. And here he is also successful.

Strong Q1 results

We can see this success in the latest Q1 results of the company. In this quarter, commercial revenues in the US increased by 71% a year to USD 255 million. In general, revenues increased by 39% year on year to USD 884 million.

In the quarter, the company closed 139 transactions in the amount of at least USD 1 million, 51 contracts in the amount of at least USD 5 million and $ 31 in the amount of at least USD 10 million – impressive items!

Based on these robust results, the company has raised its guidelines for 2025. It now expects a total enhance in revenues by 36% and an enhance in commercial revenues in the US by 68%.

We provide an operating system for a up-to-date enterprise in the AI ​​era.
Alex Karp, co -founder and general director of Palantir

Breaking the rules 40

It should be noted that in the first quarter Palantir easily broke “Principle 40”. This is a commonly used reference point in the software industry, which suggests that the company’s revenue rate plus a profit margin should be equalized or exceeded 40%. In the case of Palantir, it provided the principle of 40 results 83% in Q1. It’s impressive again.

Having said this, the profits are still relatively low. In the quarter, the corrected net income attributed to joint shareholders was USD 334 million, i.e. USD 0.13 per share.

Quotation

What about the valuation? Well, here things become a bit challenging for me. I do not think that the price for profit (p/e) is the correct valuation indicator for exploit here. When the company performs disturbing things, such as Palantir, it is (and sees a fertile enhance), but still has low earnings, p/e indicators are usually irrelevant.

However, we can look at the price ratio for sale. Today, USD 281 billion. Meanwhile, in 2025, Palantir expects to generate sales of around $ 3.9 billion. So we have a price ratio for sale about 72.

This is very high. For reference, Nvidiaat around 14, while Cybersecurity Company Crowdstrike and data analytics company Snowflake They are 20 and 16 respectively (all these supplies are considered exorbitant).

My view

Given the high price of price, I will not buy shares now. In my opinion, the valuation is too high.

Currently, Palantira is in the price, as if it would grow 40% per year for an indefinite period. History shows, however, that this is unlikely – at some stage growth probably slowly (recession can be a catalyst).

However, I intend to stop the supply on my observation list. At the right price I was able to be interested in taking a petite position.