Is AGS Transact overvalued or undervalued?

As of 17 February 2025, the valuation grade for AGS Transact has moved from very attractive to risky, indicating a significant shift in market perception. The company appears to be overvalued at this time, especially considering its negative PE ratio of -0.40 and an EV to EBITDA ratio of 17.98, which is notably high compared to its peers. Additionally, the ROE stands at a mere 1.72%, suggesting inefficiency in generating returns for shareholders.
In comparison to its peers, AGS Transact's valuation metrics are concerning. For instance, Tata Consultancy Services Ltd. has a PE ratio of 25.23 and an EV to EBITDA of 17.63, while Infosys Ltd. shows a PE of 24.32 and an EV to EBITDA of 15.83, both indicating much stronger financial health and growth potential. Furthermore, AGS Transact's stock has underperformed significantly, with a year-to-date return of -92.11% compared to the Sensex's 5.57%, reinforcing the notion that the company is currently overvalued in the market.