Is Agilysys, Inc. overvalued or undervalued?

As of 21 January 2025, Agilysys, Inc. has moved from a fair valuation to a very expensive rating. The company is currently overvalued, as indicated by its P/E ratio of 161, significantly higher than the industry average. Additionally, the Price to Book Value stands at 14.88, and the EV to EBITDA ratio is 118.06, further emphasizing the premium at which the stock is trading compared to its peers.
In comparison to its peers, Clearwater Analytics Holdings, Inc. has a much lower P/E ratio of 12.55 and an EV to EBITDA of 127.79, while AvidXchange Holdings, Inc. shows a P/E of 559.38, indicating a wide range of valuations within the sector. Despite Agilysys' recent stock performance showing a 14.94% return over the past year compared to the S&P 500's 10.26%, the current valuation metrics suggest that investors may be overestimating the company's growth potential.