Palantir Technologies (PLTR) has set the tone for its Q1 2026 update with trailing 12 month revenue of about US$4.5b, basic EPS of US$0.69 and reported year over year earnings growth of 251.6%. Over the past reported periods, revenue has moved from US$827.5m and basic EPS of US$0.03 in Q4 2024 to US$1.4b and basic EPS of US$0.26 in Q4 2025, with the trailing net profit margin reported at 36.3% versus 16.1% a year earlier. The latest print therefore comes against a backdrop of expanding profitability. For you as an investor, the focus now is on how those higher margins and growth rates hold up as management leans into the next leg of the business.

See our full analysis for Palantir Technologies.

With the headline numbers on the table, the next step is to see how this earnings picture lines up with the most widely held narratives around Palantir's growth, profitability and risk profile.

Profitability Punch: 36.3% Net Margin On US$4.5b TTM Revenue

• On a trailing 12 month basis, Palantir generated about US$4.5b of revenue and US$1.6b of net income, translating to a 36.3% net margin compared with 16.1% a year earlier.
• Consensus narrative frames this margin profile as the result of high gross margins and operating leverage. The data backs that up but also raises the bar for future execution:
  • Trailing earnings growth of 251.6% and reported 5 year earnings growth of 80.7% per year show that profitability has scaled quickly in a relatively short window.
  • Revenue growth of 29.5% per year over the last 12 months sits alongside those margins, so the balanced view is that the business is already combining scale and high profitability, not just early stage growth.

High Growth Streak Across Recent Quarters

• Quarterly revenue in 2025 moved from US$883.9m in Q1 to US$1.4b in Q4, while basic EPS over the same period went from roughly US$0.09 to US$0.26, with net income rising from US$214.0m in Q1 to US$608.7m in Q4.
• Bulls argue this kind of progression supports expectations for strong growth ahead. The recent data lines up with that view but also shows what needs to be sustained:
  • Analysts in the bullish camp are assuming revenue growth of 44.9% per year and margin expansion from 28.1% to 41.4%, which sits above the trailing 29.5% revenue growth rate and already high 36.3% net margin.
  • Earnings are expected by bullish analysts to reach US$4.9b by around 2028, compared with US$1.1b today, so the recent combination of rising quarterly EPS and strong trailing margins is a key part of the argument that this earnings ramp is achievable.

Bulls point to fast growing commercial AI demand and expanding margins as reasons Palantir could justify aggressive growth assumptions, and you can see how that story is built off the recent numbers 🐂 Palantir Technologies Bull Case

Premium Valuation Against 44.1x P/B

• At a share price of US$135.91, Palantir is trading on a reported P/B of 44.1x versus a US software industry average of 2.8x and a peer average of 24.6x, while the stock also sits above an indicated DCF fair value of about US$126.78.
• Bears highlight this valuation as a key risk, and the figures show why they focus on it even in the face of strong growth metrics:
  • Revenue growth of 29.5% per year and earnings growth of 251.6% over the past year are strong, yet the stock still trades above the DCF fair value and on a much higher P/B than both industry and peers.
  • Analysts’ consensus price target of about US$181.69 is above the current price, but bears point out that the implied future P/E ratios in their scenarios, such as 100.6x on 2028 earnings, remain far above a US software industry P/E of around 32x.

Skeptics warn that even with rapid revenue and earnings growth, a P/B of 44.1x and a price above DCF fair value leave little room for disappointment 🐻 Palantir Technologies Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Palantir Technologies on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If the mix of strong recent numbers and rich valuation leaves you unsure, do not sit on the sidelines. Review the upside case for yourself with the 2 key rewards

See What Else Is Out There

Palantir's rich valuation, including a 44.1x P/B and a share price above an indicated DCF fair value, leaves limited room for setbacks.

If that premium price tag worries you, it makes sense to balance your research by checking companies where expectations are lower through the 51 high quality undervalued stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.