Is Drilling Tools International Corp. (US) overvalued or undervalued?

As of 13 May 2025, the valuation grade for Drilling Tools International Corp. has moved from very expensive to risky. The company appears to be undervalued based on its current metrics. The P/E ratio stands at 16, while the Price to Book Value is notably low at 0.88. Additionally, the EV to EBITDA ratio is 4.47, suggesting that the company may be trading at a discount compared to its earnings potential.
In comparison to peers, Drilling Tools International Corp. has a P/E ratio of 16.87, which is higher than LendingTree, Inc. at -15.53, but lower than Guild Holdings Co. at 17.05. The EV to EBITDA ratio of 4.68 for Drilling Tools is also higher than that of Guild Holdings Co. at 3.65, indicating a relative valuation gap. Despite recent underperformance against the S&P 500, with a 1-year return of -36.73% compared to the index's 10.26%, the current valuation metrics suggest that the stock may present a buying opportunity for investors looking for value.