PLTR's Valuation is High: Not a Red Flag, if Execution Stays

Core Insights - Palantir Technologies (PLTR) has experienced a nearly 120% gain over the past year, indicating growing confidence in the company's long-term positioning rather than short-term speculation [1][8] - The company's elevated valuation reflects market conviction in its execution, expanding use cases, and durable customer relationships, with a trailing 12-month price-to-earnings ratio exceeding 495 times and a forward 12-month multiple above 158 times [2][8] Valuation and Growth - Palantir is no longer valued solely on promise; it has shown improving operating leverage, rising commercial adoption, and a clearer path to scaling beyond its traditional government roots, justifying its premium valuation [3][5] - The valuation risk is more about pacing than overextension, as Palantir does not require explosive growth to support its current multiple but rather consistency in contract wins, customer expansion, and platform stickiness [4][5] Competitive Landscape - As Palantir's valuation increases, companies like Lockheed Martin (LMT) and RTX Corporation (RTX) provide more stable defense exposure with lower earnings multiples and large backlogs, offering steadier cash flow and less volatility [6][9] - Lockheed Martin's trailing and forward 12-month price-to-earnings ratios are just above 19 times, benefiting from global rearmament, while RTX's ratios are above 31 times and 28 times respectively, highlighting their stability in the defense sector [9]