We assign a fundamental rating of 7 out of 10 to PLTR. PLTR was compared to 278 industry peers in the Software industry. PLTR scores excellent points on both the profitability and health parts. This is a solid base for a good stock. PLTR is valued quite expensive, but it does show an excellent growth. These ratings could make PLTR a good candidate for growth and quality investing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

PLTR had positive earnings in the past year.
In the past year PLTR had a positive cash flow from operations.
In multiple years PLTR reported negative net income over the last 5 years.
PLTR had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

The Return On Assets of PLTR (13.50%) is better than 91.37% of its industry peers.
With an excellent Return On Equity value of 16.62%, PLTR belongs to the best of the industry, outperforming 84.17% of the companies in the same industry.
With an excellent Return On Invested Capital value of 9.68%, PLTR belongs to the best of the industry, outperforming 84.17% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	13.5%
ROE	16.62%
ROIC	9.68%

ROA(3y)0.38%

ROA(5y)-11.69%

ROE(3y)0.24%

ROE(5y)-19.79%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 28.11%, PLTR belongs to the top of the industry, outperforming 88.49% of the companies in the same industry.
With an excellent Operating Margin value of 21.81%, PLTR belongs to the best of the industry, outperforming 87.77% of the companies in the same industry.
With an excellent Gross Margin value of 80.81%, PLTR belongs to the best of the industry, outperforming 83.09% of the companies in the same industry.
In the last couple of years the Gross Margin of PLTR has grown nicely.

		Industry Rank	Sector Rank
OM	21.81%
PM (TTM)	28.11%
GM	80.81%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y0.96%

GM growth 5Y3.56%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PLTR is destroying value.
The number of shares outstanding for PLTR has been increased compared to 1 year ago.
PLTR has more shares outstanding than it did 5 years ago.
There is no outstanding debt for PLTR. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

An Altman-Z score of 143.54 indicates that PLTR is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 143.54, PLTR belongs to the best of the industry, outperforming 99.28% of the companies in the same industry.
There is no outstanding debt for PLTR. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	143.54

ROIC/WACC0.87

WACC11.08%

2.3 Liquidity

A Current Ratio of 6.43 indicates that PLTR has no problem at all paying its short term obligations.
The Current ratio of PLTR (6.43) is better than 90.29% of its industry peers.
PLTR has a Quick Ratio of 6.43. This indicates that PLTR is financially healthy and has no problem in meeting its short term obligations.
PLTR's Quick ratio of 6.43 is amongst the best of the industry. PLTR outperforms 90.29% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	6.43
Quick Ratio	6.43

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 82.86% over the past year.
The Earnings Per Share has been growing by 43.07% on average over the past years. This is a very strong growth
PLTR shows a strong growth in Revenue. In the last year, the Revenue has grown by 47.23%.
The Revenue has been growing by 31.01% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)82.86%

EPS 3Y43.07%

EPS 5YN/A

EPS Q2Q%110%

Revenue 1Y (TTM)47.23%

Revenue growth 3Y22.95%

Revenue growth 5Y31.01%

Sales Q2Q%62.79%

3.2 Future

Based on estimates for the next years, PLTR will show a very strong growth in Earnings Per Share. The EPS will grow by 43.31% on average per year.
Based on estimates for the next years, PLTR will show a very strong growth in Revenue. The Revenue will grow by 42.63% on average per year.

EPS Next Y79.82%

EPS Next 2Y58.55%

EPS Next 3Y50.95%

EPS Next 5Y43.31%

Revenue Next Year56.56%

Revenue Next 2Y48.71%

Revenue Next 3Y45.44%

Revenue Next 5Y42.63%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 229.05, PLTR can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of PLTR indicates a slightly more expensive valuation: PLTR is more expensive than 60.43% of the companies listed in the same industry.
PLTR is valuated expensively when we compare the Price/Earnings ratio to 28.30, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 142.23, which means the current valuation is very expensive for PLTR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PLTR indicates a slightly more expensive valuation: PLTR is more expensive than 62.23% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, PLTR is valued quite expensively.

		Industry Rank	Sector Rank
PE	229.05
Fwd PE	142.23

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as PLTR.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PLTR is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	194.69
EV/EBITDA	400.25

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PLTR has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as PLTR's earnings are expected to grow with 50.95% in the coming years.