This AI Stock Just Crushed Palantir's Rule of 40 Score. Is It a Buy Now?
Followers of Palantir (NASDAQ: PLTR) will know that the company likes to use the Rule of 40 as a performance benchmark.
This standard in the software industry means that a company should have a combined revenue growth rate and free cash flow margin, or a similar profitability measure, of at least 40 in order to be investable.
Palantir Chief Executive Officer Alex Karp hasn't been shy about touting the company's strong performance based on the Rule of 40, noting that it had a Rule of 40 score of 94 in its second-quarter report. That was made up of 48% revenue growth and 46% adjusted operating margin.
Source Fool.com
