You may think that with a price-to-sales (or “P/S”) ratio of 16.9x Palantir Technologies Inc. (NYSE:PLTR) is a stock to avoid completely, seeing as almost half of all the Software companies in the United States have P/S ratios under 4.5x and even P/S lower than 1.9x aren’t out of the ordinary. However, the P/S might be quite high for a reason and it requires further investigation to determine if it’s justified.
See our latest analysis for Palantir Technologies
How Palantir Technologies Has Been Performing
Palantir Technologies certainly has been doing a good job lately as it’s been growing revenue more than most other companies. The P/S is probably high because investors think this strong revenue performance will continue. If not, then existing shareholders might be a little nervous about the viability of the share price.
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