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 increase in perceived overvaluation. The company is currently overvalued, with a 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 such as Cadence Design Systems, Inc. have a much lower EV to EBITDA of 65.0114, and Roper Technologies, Inc. shows a fair valuation with an EV to EBITDA of 22.3384.
Despite its overvaluation, Palantir has demonstrated impressive stock performance, with a year-to-date return of 173.94% compared to the S&P 500's 16.30%, and a staggering 394.23% return over the past year against the S&P 500's 19.89%. This strong performance may reflect investor enthusiasm, but the high valuation ratios suggest that the stock may not be sustainable at these levels.