Is AFC Gamma, Inc. overvalued or undervalued?

As of 14 August 2025, the valuation grade for AFC Gamma, Inc. has moved from very attractive to risky, indicating a significant shift in its perceived investment quality. The company appears to be overvalued, particularly when considering its low P/E ratio of 6, a price-to-book value of 0.62, and an EV to EBITDA ratio of 4.58, which are all below industry norms.
In comparison to its peers, Velocity Financial, Inc. has a P/E ratio of 9.22 and Regional Management Corp. boasts a P/E of 17.39, highlighting that AFC Gamma, Inc. is trailing behind in valuation metrics. The company's recent performance is concerning, as it has underperformed the S&P 500 significantly over multiple periods, with a year-to-date return of -45.98% compared to the S&P 500's 12.22%. This underperformance reinforces the notion that AFC Gamma, Inc. is currently overvalued in the market.