Palantir has a lot of potential but the current valuation already prices this in (and more).
P/E Ratio: Current P/E ratio of 237.8 isn't sustainable. I expect this to reduce over time and align more closely with the Software Industry's P/E ratio of 32. I've given Palantir a higher P/E ratio as this valuation is based on a 5 year time horizon.
Net Profit: Current net profit margins of 16.32% are impacted by high operating expenses. I expect revenues to outstrip cost growth with a 5 year time horizon so I've increased the net profit margin in 2029 to 20%.
This is a stock I'd continue to add to but not at this valuation. I'd like to add to my position at a P/E ratio much closer to the industry average.
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