Is Evolution Petroleum Corp. overvalued or undervalued?

As of 13 May 2025, the valuation grade for Evolution Petroleum Corp. has moved from very attractive to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued, particularly when considering its high P/E ratio of 58, which significantly exceeds the industry average, and an EV to EBITDA ratio of 37.10, suggesting that investors are paying a premium for earnings before interest, taxes, depreciation, and amortization. Additionally, the Price to Book Value stands at 2.29, further highlighting the elevated valuation relative to its book value.
In comparison to peers, Evolution Petroleum Corp. has a higher P/E ratio than SilverBow Resources, Inc. at 5.01 and Granite Ridge Resources, Inc. at 11.32, both of which are considered more attractively valued. The company's return performance has been mixed; while it outperformed the S&P 500 over the past week and month, it has significantly underperformed over the longer term, with a 3-year return of -32.05% compared to the S&P 500's 70.41%. This underperformance reinforces the notion that Evolution Petroleum Corp. may not be a sound investment at its current valuation levels.