Is Magellanic Cloud overvalued or undervalued?

Jul 29 2025 08:04 AM IST
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As of July 28, 2025, Magellanic Cloud is considered very expensive and overvalued with a PE ratio of 49.83 and an EV to EBITDA of 25.65, significantly higher than its peers like TCS and Infosys, despite a recent 36.44% decline in stock performance.
As of 28 July 2025, the valuation grade for Magellanic Cloud has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently overvalued, as evidenced by its high PE ratio of 49.83, a price-to-book value of 9.99, and an EV to EBITDA ratio of 25.65. These figures suggest that investors are paying a premium for the stock compared to its earnings and book value.

In comparison to its peers, Magellanic Cloud's valuation stands out starkly; for instance, TCS has a PE ratio of 22.61 and an EV to EBITDA of 15.93, while Infosys shows a PE of 23.1 and an EV to EBITDA of 15.18. This highlights that Magellanic Cloud is trading at a much higher valuation relative to its industry counterparts. Additionally, while the stock has shown strong returns over the past three years, outperforming the Sensex significantly, its recent performance over one year indicates a decline of 36.44%, further supporting the notion that it is overvalued at its current price of 88.44.
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