Is Acacia Research Corp. overvalued or undervalued?

As of 13 March 2025, the valuation grade for Acacia Research Corp. has moved from fair to risky, indicating a deterioration in its investment appeal. The company appears to be overvalued, particularly when considering its P/E ratio of 63, which is significantly higher than its peers, such as Cass Information Systems, Inc. with a P/E of 29.81, and Franklin Covey Co. at 28.16. Additionally, Acacia's EV to EBITDA stands at 4.21, while its peer Reservoir Media, Inc. has a much higher ratio of 14.18, further suggesting that Acacia is not priced favorably relative to its industry.
The company's return metrics also paint a concerning picture, with a year-to-date return of -21.66% compared to the S&P 500's positive return of 12.22%, and a staggering 10-year return of -10.53% versus the S&P 500's 231.64%. These figures reinforce the notion that Acacia Research Corp. is currently overvalued in the market.