Is Palantir Technologies, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for Palantir Technologies, Inc. has moved from expensive to very expensive, indicating a significant shift in perception. The company is currently overvalued, as evidenced by its high Price to Book Value of 55.57, an EV to EBITDA ratio of 679.96, and an EV to Sales ratio of 95.03. In comparison, peers like Cadence Design Systems, Inc. and Roper Technologies, Inc. have lower EV to EBITDA ratios of 65.0114 and 22.3384, respectively, highlighting Palantir's relative overvaluation in the software products industry.
Despite its high valuation, Palantir has delivered impressive returns, with a year-to-date return of 165.07% compared to the S&P 500's 16.30%, and a three-year return of 2180.66% against the S&P 500's 76.66%. This performance may attract investor interest, but the underlying valuation metrics suggest that the stock is not justified at its current price levels.