Is Kairosoft AI overvalued or undervalued?

As of 29 August 2025, Kairosoft AI's valuation grade has moved from attractive to very expensive, indicating a significant shift in its market perception. The company is currently overvalued, with a PE ratio of 13.99, an EV to EBIT of 5.72, and a PEG ratio of 0.08. Comparatively, Bajaj Finance, another player in the industry, has a much higher PE ratio of 31.3, while Life Insurance, considered very attractive, has a lower PE of 11.08.
The financial metrics suggest that Kairosoft AI is not only overvalued but also struggling with a negative capital employed in its EV to Capital Employed ratio, which stands at -0.28. This raises concerns about its operational efficiency and profitability, as reflected in its low ROE of 2.14%. The company's recent stock performance has been dismal, with a year-to-date return of -25.98%, contrasting sharply with the Sensex's positive return of 2.14%, further reinforcing the notion that Kairosoft AI is currently overvalued.