Palantir Technologies (NASDAQ:PLTR) shares increased by approximately 7% during Friday’s trading session after The New York Times revealed that the U.S. government is broadening its adoption of Palantir’s main foundry tool throughout federal agencies. The company has witnessed more than $113 million in federal government expenditures since the new Trump administration took office, stemming from both existing contracts and new agreements with the Department of Homeland Security and the Pentagon. Palantir is reportedly also in discussions with the Social Security Administration and the Internal Revenue Service regarding the use of its technology. Additionally, the company secured a $795 million contract from the Department of Defense in late May.

Although the company’s expansion into the public sector is encouraging, we believe that the stock seems – rendering it a at its current valuation of around $130. We consider the stock to be quite reactive to negative occurrences, given its exceedingly high valuation. Our assessment arrives from contrasting the current valuation of PLTR stock with its operational performance over recent years, along with its current and historical financial metrics. Our evaluation of Palantir Technologies using key indicators of Growth, Profitability, Financial Stability, and Downturn Resilience indicates that the company possesses a operating performance and financial status, as elaborated below. That being said, if you’re looking for potential gains with lower volatility than individual stocks, the Trefis High Quality portfolio serves as an alternative, having outperformed the S&P 500 and generated returns surpassing 91% since its inception.

Based on what you pay for each dollar of sales or profit, PLTR stock when compared to the overall market.

• Palantir Technologies has a price-to-sales (P/S) ratio of 91.1 compared to a figure of 3.0 for the S&P 500
• Additionally, the firm’s price-to-free cash flow (P/FCF) ratio is 212.7 in contrast to 20.5 for the S&P 500
• Furthermore, it has a price-to-earnings (P/E) ratio of 497.4 versus the benchmark's 26.4

Palantir Technologies’ Revenues have increased significantly over recent years.

• Palantir Technologies has experienced its top line during the last 3 years (compared to a 5.5% increase for the S&P 500)
• Its revenues have from $2.2 billion to $2.9 billion in the past 12 months (against a 5.5% increase for the S&P 500)
• Additionally, its quarterly revenues to $828 million in the latest quarter from $608 million a year prior (in comparison to a 4.8% improvement for the S&P 500)

Palantir Technologies’ profit margins within the Trefis coverage universe.

• Palantir Technologies’ Operating Income over the last four quarters amounted to $406 million, yielding a (versus 13.2% for the S&P 500)
• Palantir Technologies’ Operating Cash Flow (OCF) during this timeframe was $1.3 billion, suggesting a (as opposed to 14.9% for the S&P 500)
• For the most recent four-quarter period, Palantir Technologies’ Net Income was $571 million – indicating a (compared to 11.6% for the S&P 500)

Palantir Technologies’ balance sheet appears .

• Palantir Technologies’ Debt level was $245 million at the end of the most recent quarter, while its market capitalization is $310 billion (as of 5/30/2025). This denotes a (compared to 19.9% for the S&P 500). [Note: A low Debt-to-Equity Ratio is favorable]
• Cash (including cash equivalents) constitutes $5.4 billion of the $6.7 billion in Total Assets for Palantir Technologies. This results in a (versus 13.8% for the S&P 500)

PLTR stock has the benchmark S&P 500 index during several recent downturns. While investors remain hopeful for a soft landing in the U.S. economy, one might wonder just how severe things could become if another recession were to occur. Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks perform during and after the last six .

• PLTR stock experienced a decline of from a high of $39.00 on January 27, 2021, to $6.00 on December 27, 2022, contrasted with a peak-to-trough decrease of for the S&P 500
• The stock by October 3, 2024
• Since then, the stock has risen to a peak of $131.78 on June 1, 2025

• PLTR stock declined by from a peak of $39.00 on January 27, 2021, to $17.96 on December 20, 2021, in contrast to a peak-to-trough drop of for the S&P 500
• The stock fully regained its pre-Crisis peak by October 3, 2024

In conclusion, Palantir Technologies’ performance across the specified parameters is as follows:

• Growth: Extremely Strong
• Profitability: Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Extremely Weak
• Overall: Strong

All in all, Palantir’s robust recent growth and solid cash flow are commendable, but its exceedingly high valuation and susceptibility to downturns should cause investors to reflect before investing in the stock.

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