Palantir (PLTR) Stock: What the PEG Ratio Says About Its Valuation

TLDR

• Palantir’s PEG ratio sits at 0.964, technically placing it in undervalued territory despite a P/E ratio of 226x trailing earnings.
• UBS raised its price target from $180 to $200, maintaining a buy rating, implying ~36% upside from current levels.
• PLTR is down 13% in 2026 so far, though it has risen over 500% in the past five years.
• Full-year 2026 revenue guidance of $7.18–$7.20 billion implies ~61% revenue growth, well ahead of prior consensus.
• Q4 2025 U.S. commercial revenue rose 137% year over year, and Palantir posted an all-time high “rule of 40” score of 127%.

Palantir Technologies (PLTR) currently trades at $147–$148 per share.

Palantir Technologies Inc., PLTR

Wall Street has long treated Palantir as one of the most expensive stocks in tech. A trailing P/E of 226x tends to do that. But look at a different metric — the PEG ratio — and a different story starts to emerge.

Palantir’s PEG ratio currently sits at 0.964. Anything below 1.0 is generally considered undervalued territory. The reason it gets there is simple: the company grew earnings per share by 232% year over year in 2025. When you divide that sky-high P/E by that kind of growth, the number shrinks fast.

That EPS growth was helped along by a big jump in profit margins — from 10% in Q4 2024 to 43% in Q4 2025. That’s a one-time kind of leap. Margins can keep improving, but they can’t quadruple again.

UBS Raises Price Target to $200

Against a backdrop where PLTR is down 13% year-to-date in 2026, UBS made a notable call this week — raising its price target from $180 to $200 while maintaining a buy rating. That implies roughly 36% upside from where the stock is trading now.

UBS has previously described Palantir as a “premier growth story.” The upgrade followed another strong quarter: Palantir reported Q4 EPS of $0.25 versus $0.23 expected, with revenue of $1.41 billion — up 70% year over year.

The bigger catalyst may have been February’s guidance. Management projected Q1 2026 revenue of $1.532–$1.536 billion and full-year 2026 revenue of $7.18–$7.20 billion. That would represent roughly 61% annual revenue growth, well above prior consensus of around $1.31 billion for the quarter.

In Q4 2025, Palantir closed 180 deals worth at least $1 million, including 61 deals worth $10 million or more. U.S. commercial revenue was up 137% year over year for the quarter.

AIP Bootcamps Compressing the Sales Cycle

A key part of the 2026 growth story is how Palantir is landing new enterprise clients. Its AIP bootcamp model is designed to compress AI sales cycles from months down to days — getting customers from demo to production faster than traditional software rollouts.

The company posted a “rule of 40” score of 127% in Q4 2025, an all-time high, reflecting strong combined revenue growth and profitability.

The setup heading into 2026 is clear: Palantir’s valuation is no longer pricing in potential — it’s pricing in execution. UBS’s revised $200 target reflects confidence that bootcamp conversions and commercial momentum can hold.

The most recent analyst consensus sits at an average price target of $187, implying around 27% upside from current levels.

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