Is AMERISAFE, Inc. overvalued or undervalued?

As of 8 May 2025, the valuation grade for AMERISAFE, Inc. has moved from very expensive to expensive, indicating a shift towards a more cautious outlook. The company is currently considered overvalued based on its financial metrics. The P/E ratio stands at 20, while the industry average P/E is slightly higher at 19.04, suggesting that AMERISAFE's valuation is not justified relative to its peers. Additionally, the EV to EBITDA ratio is exceptionally high at 796.88, further supporting the overvaluation assessment.
In comparison to its peers, Safety Insurance Group, Inc. has a P/E of 19.04 and ProAssurance Corp. is at 32.67, highlighting that AMERISAFE's valuation is on the higher end despite its lower growth potential, as indicated by its PEG ratio of NA. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -14.22% compared to the index's 2.44%, reinforcing the notion that AMERISAFE is overvalued in the current market environment.