Palantir Technologies (PLTR -0.23%) stock fell sharply last week after the company released its latest earnings numbers. The company generated solid, double-digit growth and it even posted a profit for the sixth consecutive quarter. But despite the positives, investors still wanted more from the business. Is the market being a bit harsh on the data analytics company, and does the sell-off make Palantir a good stock to buy right now?

The company beat expectations in Q1, for almost everything

An important measuring stick for any growth stock is how well it does versus analyst expectations. It's not just whether the business is improving, it's whether it's doing so in line with what Wall Street is expecting, as those expectations would technically be priced into the stock's valuation. A beat, however, would suggest the business is doing better. And normally, that's enough to drum up some bullishness.

For the first quarter, which ended on March 31, Palantir didn't disappoint on its top and bottom lines. Revenue of $634 million came in higher than expectations of $625 million. And adjusted earnings per share of $0.08 matched up with Wall Street's projections as well.

Where it fell short, unfortunately, was the guidance. For the full year, the company anticipates revenue will be within $2.68 billion to $2.69 billion -- less than expectations of $2.71 billion. And its forecast for the current quarter was also slightly less than expected. Investors may be concerned that demand for its AI platform AIP may not be as strong it appeared to be.

Why would this justify such a steep sell-off?

The day following the release of the results, Palantir's stock would close at $21.40 -- 15% lower than the $25.21 it closed at the previous day. With the dip in price, that puts the stock back to around the levels it was at in early February.

At first glance, it looks to be an overreaction to guidance that only slightly missed expectations. But there are two numbers investors need to consider.

The first is 2.1 -- that's the stock's beta value over the past year, and it indicates that Palantir's stock is far more volatile than average. A stock that would follow the market's movements would have a beta value of around 1. Palantir is nowhere near there. It has a high short interest, and retail investors play a big part in the stock's movements, which make it more volatile than many other stocks.

The second number is the stock's $47 billion valuation. Palantir isn't a cheap stock by any multiple. It trades at more than 60 times its estimated future earnings. Its price-to-book multiple is 12, and its price-to-sales ratio is more than 20. The danger when a stock is trading at such high multiples is that the bar is extremely high, which means it needs to hit absolutely all expectations. And sometimes just a minor beat may not be enough to satisfy investors. And that high valuation is likely a key reason why the stock nosedived as much as it did last week.

Should you buy Palantir's stock?

Palantir's business is growing at a solid rate of more than 20%, and it looks to be on a positive path forward. But given its volatility and high valuation, I would need to see its price fall much further than this to consider investing in it.

While Palantir can be a good buy for the long term, its price remains excessively high, and it may take a long time before the stock can justify this type of valuation. There are simply better-priced growth stocks out there to choose from than Palantir right now.