Is Amdocs Ltd. overvalued or undervalued?

As of 6 August 2025, Amdocs Ltd. has moved from a fair to a very attractive valuation grade, indicating a strong improvement in its perceived value. The company appears to be undervalued, particularly when considering its P/E ratio of 39, which is significantly higher than the peer average of 22.01 for EPAM Systems, Inc., and its EV to EBITDA ratio of 25.68 compared to the peer average of 11.68. Additionally, Amdocs' PEG ratio stands at 3.88, which suggests that its growth prospects may not justify its current valuation when compared to its peers.
In the context of recent performance, Amdocs has underperformed against the S&P 500 across multiple time frames, with a 1-year return of -2.05% compared to the S&P 500's 17.14%. This underperformance, coupled with the high valuation ratios, reinforces the notion that Amdocs may be undervalued relative to its growth potential and competitive positioning within the software and consulting industry.