Is Palantir Technologies, Inc. overvalued or undervalued?

As of 8 May 2025, the valuation grade for Palantir Technologies, Inc. has moved from fair to expensive, indicating that the company is overvalued. Key ratios highlight this assessment, with a Price to Book Value of 55.57, an EV to EBIT of 729.87, and an EV to EBITDA of 679.96. These figures suggest that the company's valuation metrics are significantly elevated compared to its peers.
In comparison to notable competitors, Cadence Design Systems, Inc. has a more reasonable P/E ratio of 87.87 and an EV to EBITDA of 56.62, while Synopsys, Inc. shows a P/E of 54.66 and an EV to EBITDA of 41.40. These ratios further emphasize Palantir's overvaluation. Additionally, despite a strong recent performance with a year-to-date return of 85.01% compared to the S&P 500's 2.44%, the current valuation metrics suggest that investors may be overestimating the company's future growth potential.