Is Palantir Technologies, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for Palantir Technologies, Inc. moved from expensive to very expensive, indicating a significant deterioration in its valuation outlook. The company is overvalued, particularly highlighted by its Price to Book Value of 55.57, EV to EBITDA of 679.96, and an EV to Sales ratio of 95.03. In comparison, peers such as Roper Technologies, Inc. have a more reasonable EV to EBITDA of 22.34, while Cadence Design Systems, Inc. also shows a very expensive valuation with an EV to EBITDA of 65.01.
Despite the overvaluation, Palantir has demonstrated impressive stock performance, with a year-to-date return of 165.07%, significantly outpacing the S&P 500's return of 16.30% over the same period. However, the extreme valuation ratios suggest that the stock may not be sustainable at these levels.