Palantir Technologies (NYSE:PLTR) reported its first-quarter results of fiscal 2021 on May 11. The tech company generated sales of $341 million which were up 49% year over year. That was an improvement from the previous quarter where sales of $322 million were up 40% from the prior-year period.
However, it's still some strong growth from a company that gets a significant chunk of its revenue from the U.S. government.
For investors, the big hesitation is whether the stock is too expensive given that Palantir continues to stay in the red; in Q1 its net loss was $123 million, which was slightly smaller than the $148-million loss it incurred in the previous quarter.
In the past 12 months, Palantir's sock has more than doubled in value while the S&P 500 has risen by just 24%. With $1.2 billion of revenue generated over the past four quarters and a market cap of more than $37 billion, investors are paying a multiple of more than 30 times sales to own shares of Palantir. Another analytics company, Adobe (NASDAQ:ADBE), trades at just 17 times its trailing revenue and posts a profit.
However, given the impressive growth numbers Palantir has been generating of late, it may be worth justifying a premium for the stock, especially since things have cooled of late. In the past three months, its shares have fallen more than 35% and reached levels not seen since November 2020. Although it isn't a cheap investment, for growth investors, Palantir could be a promising stock to buy right now.
