Is Epsilon Energy Ltd. overvalued or undervalued?

As of 30 June 2025, Epsilon Energy Ltd. has moved from an expensive to a very expensive valuation grade. The company appears to be overvalued based on its current metrics, which include a P/E ratio of 23, an EV to EBITDA of 6.93, and a PEG ratio of 0.41. In comparison to its peers, Epsilon's P/E ratio is significantly higher than Tellurian, Inc. at -6.30 and Riley Exploration Permian, Inc. at 5.24, indicating a premium valuation relative to the market.
The company's recent stock performance has been underwhelming, with a year-to-date return of -16.26% compared to the S&P 500's 12.22%, and a three-year return of -25.18% against the S&P 500's 70.41%. This further reinforces the notion that Epsilon Energy Ltd. is overvalued in the current market environment.