Palantir shares trade at a very high adjusted earnings multiple, prompting scrutiny of valuation

Palantir Technologies’ (PLTR) valuation came under fresh scrutiny after a Trefis analysis highlighted how expensive the stock can look on certain earnings-based measures. In an Oct. 13, 2026 write-up, the outlet reported that Palantir shares were trading at roughly 137.7 times adjusted earnings over the past twelve months. The analysis framed this as a “look expensive” warning, rooted primarily in a single high multiple rather than a broad change in fundamentals described in the post.

The metric cited in the analysis is based on “adjusted earnings,” a variant of profit that tries to smooth out items management may treat as non-cash or not reflective of recurring performance. In this case, Trefis said the multiple incorporates stock-based pay back after tax. Stock-based pay refers to compensation granted in the form of shares or options, which can dilute existing shareholders and can also boost reported expenses even though the cash impact may differ from traditional wage costs.

By adding back stock-based pay after tax, the adjusted earnings number will typically be higher than a more conventional earnings figure. That matters for valuation because a higher denominator (adjusted earnings) would normally pull a price-to-earnings multiple down, while a low adjusted earnings base pulls it up. The post’s headline result, however, remained elevated, suggesting that even after this specific adjustment, the earnings measure used was still small relative to the market price at the time of publication.

Trefis’ approach is also relevant because it can create sharp differences versus other valuation yardsticks investors use, such as forward price-to-earnings, price-to-sales, enterprise value to revenue, or discounted-cash-flow style models. In practice, the same company can look “cheap” or “expensive” depending on whether investors emphasize near-term earnings, long-term growth expectations, or recurring revenue streams. The Oct. 13 analysis, according to its own description, focused on the trailing twelve-month earnings multiple rather than a growth-adjusted forecast.

Palantir is widely discussed in the context of analytics software and government or enterprise deployments that may be sold under contracts and measured through revenue recognition and customer adoption timelines. For companies with such operating models, trailing earnings can be volatile, and stock-based compensation can be a meaningful component of employee cost. That combination can make earnings-based multiples less stable and more sensitive to the specific adjustments chosen by analysts.

Even so, it is important to separate what the post does and does not establish. Based on the information provided in the Trefis item, the key disclosed facts are the approximate 137.7 adjusted earnings multiple and the definition detail about adding back stock-based pay after tax. The post does not, within the excerpt provided here, lay out how Palantir’s revenue, margins, or cash flow moved during the same period, nor does it quantify changes from prior quarters or present a multi-year outlook.

What to watch next is how the market’s expectations align with subsequent reporting. Investors will likely focus on whether Palantir’s reported results and any continued use of stock-based compensation influence the relationship between its share price and its adjusted earnings over time. If future adjusted earnings rise meaningfully while the share price holds steady, the multiple could compress; if adjusted earnings stagnate or fall, the valuation would remain elevated. The next earnings reports and any disclosures that clarify the size and role of stock-based compensation will be central to that assessment.