Is Fusion Finance overvalued or undervalued?

As of 14 August 2025, Fusion Finance's valuation grade has moved from risky to expensive, indicating a shift in the perception of its financial health. The company appears to be overvalued based on its current metrics. Key ratios include a PE Ratio of -1.16, an EV to EBITDA of -16.17, and a ROE of -77.96%, all of which suggest significant financial distress and inefficiency.
In comparison to its peers, Fusion Finance stands out negatively; for instance, Life Insurance boasts a PE Ratio of 11.53 and an EV to EBITDA of 8.97, while Bajaj Finance has a PE Ratio of 30.73 and an EV to EBITDA of 17.64. These comparisons highlight that Fusion Finance is not only underperforming but is also trading at a premium relative to healthier companies in the finance sector. Additionally, the company's stock has significantly underperformed the Sensex, with a year-to-date return of -15.3% compared to the Sensex's 3.15%, reinforcing the notion that Fusion Finance is currently overvalued.