Is Newgen Software overvalued or undervalued?

As of 1 February 2024, Newgen Software Technologies Ltd. has moved from a fair valuation to a very expensive rating. The company is currently overvalued, with a PE ratio of 55.41, a Price to Book Value of 11.52, and an EV to EBITDA ratio of 44.12. These metrics indicate that the stock is trading at a significant premium compared to its earnings and book value.
In comparison to its peers, Newgen's valuation stands out, particularly when looking at its PE ratio of 55.41 against competitors in the industry, which typically exhibit lower valuations. For instance, if we consider similar companies, they generally have a PE ratio below 30, indicating that Newgen's valuation is not only higher but may also be unsustainable. Additionally, while the company has shown impressive returns over the past year, outperforming the Sensex with a 29.93% increase compared to the index's 7.55%, the current high valuation suggests that future growth may already be priced in.