Is Gran Tierra Energy, Inc. overvalued or undervalued?

As of 1 May 2025, Gran Tierra Energy, Inc. has moved from an attractive to a risky valuation grade, indicating a significant deterioration in its financial outlook. The company is currently assessed as overvalued, particularly given its negative P/E ratio due to losses and a low price-to-book value of 0.43. Key ratios such as the EV to EBITDA at 2.34 and the EV to EBIT at 8.18 further highlight the company's struggles relative to its earnings potential.
In comparison to peers, Gran Tierra's valuation metrics are concerning. For instance, Tellurian, Inc. has a negative P/E of -6.30 and an EV to EBITDA of -26.11, while Riley Exploration Permian, Inc. presents a fair valuation with a P/E of 4.98 and an EV to EBITDA of 3.18. The notable underperformance of Gran Tierra is underscored by its stock returns, which have lagged significantly behind the S&P 500 over various time frames, particularly a 1-year decline of 43.27% compared to the index's gain of 10.26%.