Palantir Could Be the Most Overvalued Company That Ever Existed

We're entering a caller play successful the market. Call it what you privation - a paradigm displacement oregon simply shifting capitalist sentiment - but it's wide that valuations present matter.

• Palantir (PLTR) trades astatine 360x trailing net and 153x guardant net with a marketplace headdress adjacent $370B.

• Palantir’s PEG ratio sits astatine 4.2x based connected 36.8% expected net growth.

• Palantir would request to turn revenues 1,500% implicit 25 years to warrant its existent valuation.

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Unlike erstwhile periods of time, specified arsenic the maturation frenzy pursuing the onset of the pandemic successful which immoderate unprofitable maturation banal with a tenable communicative could skyrocket successful worth overnight connected an thought alone, investors are intelligibly clamoring for returns.

Investors aren't looking for returns a decennary oregon 2 from now, but today. This immediacy and displacement successful capitalist risk-taking preferences is connected wide display, with a fig of the apical AI-related tech names successful the Nasdaq seeing their valuations deed hard successful caller weeks.

Let's dive into Palantir (NASDAQ:PLTR) and its surge this twelvemonth to all-time highs, followed by its much caller terms action, and effort to marque heads oregon tails of what's going on.

Here's wherefore I deliberation this caller dip is conscionable that - a dip connected the mode to a overmuch longer and protracted selloff for Palantir and different similarly-overpriced mega-cap tech stocks.

Palantir's stock terms astatine astir $155 per stock astatine the clip of penning implies a marketplace capitalization of astir $370 billion. That's larger than galore of the apical blue-chip stocks galore investors instrumentality for granted, and is simply a valuation that's bestowed upon a institution that became profitable conscionable a fewer years agone (after decades of being unprofitable).

At this existent stock terms level, PLTR banal is present trading astatine 360-times trailing net and 153-times guardant earnings. On a price-sales basis, this company's valuation comes successful astatine an eye-watering valuation of much than 100-times.

I'll harken backmost to the celebrated capitalist Peter Lynch, who outlined a communal strategy helium pinned connected what became called the terms net to maturation (or PEG) ratio. His content is that companies valued astatine price/earnings ratios which are little than their underlying net maturation rates (a PEG ratio little than one) are investable.

Assuming Palantir volition proceed to turn its net astatine a 36.8% clip (according to analysts' consensus) successful 2026, astatine a guardant price-earnings ratio of 153-times, Palantir banal is trading astatine a PEG ratio of astir 4.2-times.