Is MarketWise, Inc. overvalued or undervalued?

As of 9 February 2021, the valuation grade for MarketWise, Inc. moved from does not qualify to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued, given its P/E ratio of 3, which is significantly lower than the industry average, and a PEG ratio of 0.07, suggesting that the stock may not be priced appropriately relative to its earnings growth potential. Additionally, the EV to EBITDA ratio stands at 2.54, which further supports the notion that the company's valuation metrics are not favorable compared to its peers.
In comparison to its peers, MarketWise's P/E ratio of 3.50 is higher than that of Rackspace Technology, Inc. at -1.35 and Forge Global Holdings, Inc. at -3.89, but still indicates a concerning valuation environment. The company's recent stock performance has been mixed; while it has outperformed the S&P 500 year-to-date with a return of 49.69% compared to 12.22%, it has significantly underperformed over longer periods, such as a 3-year return of -65.04% versus 70.41% for the S&P 500. This inconsistent performance underscores the risks associated with investing in MarketWise, Inc. at its current valuation.