Is Palantir Stock Really Expensive?
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Shares of Palantir Technologies (PLTR) currently trade at 93.5 times adjusted earnings for the twelve months to September 2026, a trailing metric that adds after-tax stock-based compensation back to normalized net income. While that valuation represents a steep price for one year of profit, buyers are also paying for the profit still to come. So what are you really paying for the profit Palantir is forecast to earn over the next two years?
How Expensive Is Palantir On Its Forecast Profit?
Expensive on near-term profit, less so on fiscal 2027. On the consensus forecast for fiscal 2026, Palantir’s share price is 94.1 times the analysts’ average earnings estimate. That estimate may not add back stock-based compensation, as the 93.5 times trailing figure does. On the forecast for fiscal 2027, the same price is 62.4 times earnings.
Palantir has already reported three quarters of fiscal 2026, so what you are paying depends mostly on fiscal 2027. The consensus forecast for that year is uncertain: the gap between the highest and lowest per-share earnings estimates is 31.7% of the average estimate.
What Palantir Must Deliver For The Forecast To Hold
The company must keep growing fast, though not at its previous pace. The consensus forecast models fiscal 2027 revenue at $13.1 billion, up 54.0% from the year before. Over the twelve months to September 2026, Palantir’s revenue grew 87.1% from the twelve months before.
The fiscal 2026 forecast aligns closely with management’s own guide. On November 2, 2026, Palantir raised its fiscal 2026 revenue guide to $8.53 billion, up from $8.15 billion in August. The $8.5 billion consensus forecast for that year sits just below management’s mark.
In the consensus forecast, profit also stays at about half of sales. The net margin in that forecast is 50.5% for fiscal 2027, against the 36.3% Palantir reported for fiscal 2025, its last full year. In the four quarters ended September 2026, its reported net margin was already 50.3%. That wider margin is an assumption in the forecast, not a full-year result yet. So for the forecast to hold, Palantir can grow more slowly than it has, but it has to keep a margin it has not yet shown over a full fiscal year.
Where Could Palantir’s Forecast Go Wrong?
New business presents the most likely area where the forecast could fall short. During the third quarter of fiscal 2026, Palantir signed contracts worth $2.918 billion in total value, a 6% increase from a year earlier. Revenue in that quarter grew 95.9%. Within the U.S. commercial business, where revenue grew 148%, the value of signed contracts rose 11%. Over the past twelve months, though, Palantir closed $6.114 billion of U.S. commercial deals, a 62% increase from the twelve months before.
During the November 2, 2026 call, management explained the slower contract growth: several large deals for the Sovereign AI offering were shorter than usual as customers adopted it quickly. Management expects these contracts to grow longer and larger over time. If signings continue to grow slowly, the consensus forecast for fiscal 2027 sales would move down. If contracts lengthen as management expects, the forecast would hold.
If Palantir meets the consensus forecast, the price on fiscal 2027 profit is a fair picture of what you pay for Palantir. Where it is most likely to fall short is the value of new contracts, and a shortfall there would make the stock a riskier bet, priced for profit it has not earned. Palantir is expected to report in February 2027, and the growth in the contract value it signs is the measure to watch.
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