Is Astrana Health, Inc. overvalued or undervalued?

As of 27 February 2025, the valuation grade for Astrana Health, Inc. has moved from fair to very expensive, indicating a significant shift in its market perception. The company is currently considered overvalued based on its financial ratios, with a P/E ratio of 36, an EV to EBIT of 19.76, and an EV to EBITDA of 14.41. In comparison to peers, Select Medical Holdings Corp. has a P/E of 7.26 and Premier, Inc. has a P/E of 14.00, highlighting that Astrana Health's valuation is substantially higher than these competitors.
Additionally, Astrana Health's return on capital employed (ROCE) stands at 8.80% and return on equity (ROE) at 5.30%, which are relatively low compared to industry standards. The company's stock has underperformed against the S&P 500 over the past year, with a decline of 39.25% compared to the index's gain of 10.26%. This further reinforces the view that Astrana Health, Inc. is overvalued in the current market environment.