Palantir's Soaring Growth Sparks Comparisons to ServiceNow, Uber

Palantir's stock has soared 1,760% in 2023, driven by impressive revenue growth and improved operating margins. However, with its high valuation, many investors might find better opportunities in ServiceNow and Uber moving forward.

Date: 10-05-2025

AI Rating: 7

Impressive Financial Growth from Palantir
Palantir Technologies has posted remarkable financial performance in recent years, with revenue growth accelerating, especially in its U.S. commercial sector where revenues more than doubled. Its revenue is expected to climb another 34% this year, further showcasing its expansion potential. The overall revenue for 2023 is projected to rise 50% compared to 2022 levels. Furthermore, the operating margin exhibited a notable increase, expanding from 24% to 44%. This is indicative of enhanced operating leverage, which supports the profitability of the company.

However, high valuations raise concerns. The stock's trading metrics reveal an enterprise value that exceeds 70 times expected 2025 sales, translating to a forward PE ratio of over 200. This steep valuation underscores how quickly the stock has outpaced its financial improvements, leaving it vulnerable to fluctuations caused by market sentiment. A misstep in earnings or unfavorable news could significantly impact Palantir's stock price.

Comparative Strengths of ServiceNow and Uber
ServiceNow has maintained solid growth through its strategic approach. Recent AI developments have positioned it to capture substantial market opportunities, with subscription revenue projected to increase significantly next year. The company's anticipated growth also reflects the potential expansion of its addressable market. With strong customer retention and a healthy backlog of contracts, ServiceNow appears to offer a consistent growth trajectory.

Uber Technologies has shown operational improvement with positive EBITDA margins and significant free cash flow growth. The anticipated approach towards autonomous vehicles may provide long-term growth avenues, although current market apprehensions are evident. However, its valuations remain comparatively attractive relative to Palantir, with an enterprise value of only about 3.5 times forecasted 2025 sales.

Outlook for Investors
With Palantir's current high valuation, investors may want to assess whether ServiceNow or Uber present better near-term upside potential. Both companies offer strong fundamentals and growth prospects, providing compelling alternatives in the tech stock market. Overall, while Palantir's current financial metrics reflect growth, its elevated valuations warrant caution.

Stocks: PLTR NOW UBER