Should You Buy PLTR shares?

Investors must be aware that Palantir shares are trading at about 12 times this year’s sales after its post-earnings plunge. This valuation seems reasonable for a company. While it is generating more than 30% growth each year, there are more fundamentally stable stocks at comparable valuations as well as cheaper stocks.

Such rich valuations also set a high bar for $Palantir(PLTR.US)$ . This can often lead to sharp corrections on things like a less-than-perfect earnings report. Shareholders thus, do not have any room for error and no margin of safety and a lot of its future growth is also priced into the shares. This can lead to poor returns if the business needs time for its fundamentals to catch up.

While investors have reasons to be optimistic about Palantir’s long-term prospects, the stock could sink further until its price-to-sales ratio hits the high single digits. $Palantir(PLTR.US)$