Is eGain Corp. overvalued or undervalued?

As of 5 February 2025, eGain Corp. has moved from expensive to very expensive in its valuation grade. The company is currently overvalued, with a P/E ratio of 54, significantly higher than its peer Vimeo, Inc., which has a P/E of 40.05. Additionally, eGain's EV to EBIT stands at 37.49, while its EV to EBITDA is at 17.22, indicating high valuation multiples compared to its peers.
In comparison, PubMatic, Inc. is also categorized as very expensive with a P/E of 120.26, but eGain's financial metrics suggest it is not justified at these levels. The company's return on equity (ROE) is relatively low at 5.61%, and with negative capital employed, the financial outlook appears concerning. Recent stock performance shows eGain underperforming against the S&P 500 over various timeframes, particularly with a 1-year return of -0.95% compared to the S&P 500's 10.26%.