✍️ World Stocks Valuations, S&P 500 Valuation & Profitability + Palantir = Maverick Equities Charts of the Week #54

10 + 5 Maverick Charts that say 10,000 words

Dear all,

15 cherry picked Maverick Charts of the week say 10,000 words or more = the ‘How’!

Table of contents = the ‘What’! Executed in a succinct manner with the aim of a high density of ideas, because the best writing respects the reader’s time:

📊 Maverick Charts: World Stocks Valuations, S&P 500 Valuation & Profitability

📊 Bonus: Palantir (PLTR)

Objective: both data-driven insights + valuable food for thought = the ‘Why’!

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📊 Maverick Charts: World Stocks Valuations, S&P 500 Valuation & Profitability

In a Top-Down fashion, starting with World Stocks by countries and sectors, then the major U.S. Indices, followed by more nuances on the mighty S&P 500 index and its sectors — then connecting it with the fundamentals: profitability and earnings!

1. World Stocks Valuations by countries & sectors, forward P/E, chart=10,000 words!

👉 U.S. with Growth, IT & Industrials = the ‘pricey’ chaps

👉 U.K. with Value, Energy and Financials = the ‘cheap’ chaps

2. U.S. Valuations by indices via forward P/E relative to 20-year distributions:

👉 S&P 500 = 22x and top of the 20-year range, and Nasdaq = 27x and close to the range 20-year range = ‘pricey’

👉 S&P 500 equal-weight = 17x, and Midcap = 16x = more ‘decent’

3. S&P 500 Forward P/E complementary note:

👉 we are now very close to the +2 Standard Deviations (red) which equates to 23.7x

4. S&P 500 11 Sectors Valuations via forward P/E relative to historical 10 & 30-years:

👉 from 16x for Financials to 29x for Consumer Discretionary

👉 relative to history it is a very mixed bag: note Industrials on the ‘high’ end, while Real Estate on the ‘low’ end

5. S&P 500 Free Cash Flow (FCF) yield wise:

👉 2.57% now, very close to the -2 Standard Deviations (red) which equates to 2.42%

6. Shiller CAPE at 40 = not far from a historical all-time high!

👉 Valuation regimes wise, statistical evidence points to a regime shift toward higher valuations = U.S. stocks have been in a ‘high’ valuation regime since January 1992 (sole interruption during the 2007-2009 GFC)

7. Valuations shifted structurally higher over recent decades / since WW2

👉 CAPE tells us that we are way above both post-2002 (26) and pre-1992 median (14)

8. S&P 500: Valuation vs Profitability, the both surprising head scratcher one, and the key food for thought chart going forward — by periods/regimes, trend line and statistical bands +/- 1 SD via forward P/E ratio and forward Net Margin:

👉 2025-present (orange) with a very high profitability environment ...

👉 22x forward P/E multiple ‘justified’ at least partly or majority one can say = the index is more concentrated in the mega tech names, but overall a higher quality index than 10-20 years ago ...

9. In terms of the actual/realised current Net Profit Margins (NPM):

👉 at 13.2% it will likely mark the highest NPM reported since 2009

👉 current record (going back to 2009) = 13.1%, which occurred in the previous quarter

10. Q4 Earnings & Revenue scorecard (fresh as of Jan 30th) with 166 companies in:

👉 75% of S&P 500 companies have reported a positive EPS surprise and 65% of S&P 500 companies have reported a positive revenue surprise

👉 Earnings growth +13.4% = solid! And if it stays above 10% (very likely), it will mark the 5th consecutive quarter of double-digit earnings growth

👉 Revenue growth +7.6% (solid also ...)

👉 Guidance for Q1 2026: 7 S&P 500 companies have issued negative EPS guidance and 17 issued positive EPS guidance

N.B. way more via my quarterly recurrent two distinct S&P 500 reports & materially improved in all areas: structure, flow, insights and special metrics you rarely see!

✍️ S&P 500 Report: Valuation, Fundamentals, Special Metrics & Leading Indicators

✍️ S&P 500 Report: Performance, Sentiment, Seasonality, Technical Analysis

The reports aim to break down the key question:

“Where are we, what are the key drivers, what are the technicals saying, how is the Sentiment?

“Is the stock market = highly undervalued (very cheap), undervalued (cheap), fairly valued, overvalued (expensive), or highly overvalued (very expensive)?”

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📊 Bonus: Palantir (PLTR) 📊

Palantir Technologies (PLTR) reported yesterday great Q4 results:

Growth rates:

• Government Revenue: +66%

• Commercial Revenue: +137%

• Customer Count: +34%

• Adjusted EPS: +243%

• Remaining Performance Obligations (RPO): +143%

• Net Dollar Retention Rate: 139%

Stock reacted +7.2% after hours yesterday, and +5.77% today heading into the closing.

Let’s get visual now with selected fundamentals:

1. Revenue:

👉 $1.4 billion for the quarter = super solid!

👉 Business is scaling very well, especially in the last 3 years ramping up!

2. Operating Income:

👉 $575 million for the quarter = super solid also, confirming the scaling!

3. Adjusted Operating Margin & Revenue Growth:

👉 Palantir a huge outlier with a 127% & the only one inside the ‘Rule of 120 Frontier’

4. Stock-Based Compensation (SBC):

👉 $196 million, it’s not high not low given that the business is scaling nicely

5. The big big question is VALUATION as during waves, the stock is not the business & the business is not the stock!

S&P 500 top 5 by Price/Sales multiple - guess #1? Palantir = drum rollllls ... 82.7x !!!

👉 = 2.75x greater than the 2nd highest P/S ratio in the S&P 500 which belongs to Texas Pacific Land (TPL) at 30.1x

👉 = 3.3x greater than the 3rd highest P/S ratio in the S&P 500 which belongs to AppLovin (APP) at 25.2x

👉 = 3.50x greater than the 4th highest P/S ratio in the S&P 500 which belongs to Broadcom (AVGO) at 23.6x

👉 = 3.53x greater than the 5th highest P/S ratio in the S&P 500 which belongs to Nvidia (NVDA) at 23.6x

Let that one sink in & bring the sink if you wish 😉!

Overall, I think Palantir is a great business, will do well, but the valuation is way too high now for me. I still believe it is very dependent on the market (beta).

👉 when the market will correct 20%, Palantir stock likely dropping 40-50%

👉 when the market will correct 30%, Palantir stock likely dropping 60-70%

Maverick idea: 2027-2028 Long Puts (to hedge or speculate) are now a good idea!

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Maverick Charts 54th edition done, 10 key charts with many insights + 5 Bonus!

You can check all the previous 53 editions in the Maverick Charts section!

Mission accomplished for me if the following resonates with you:

• ‘Hmm I never thought it that way’, ‘now that chart said a whole lot’, ‘now that chart was really interesting’, ‘now that is something new’, ‘now I got it!’, ‘you managed to turn something complex into something actually simple’

• hence, if you got to see something differently, my approach gave you a different angle, it did help you connect your key dots, then here we all do well!

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Your Maverick 👋 🤝

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