Is Open Lending Corp. overvalued or undervalued?

As of 31 March 2025, the valuation grade for Open Lending Corp. has moved from expensive to risky, indicating a significant deterioration in its financial standing. The company is currently overvalued, as reflected by its Price to Book Value of 3.07 and negative ratios for EV to EBIT and EV to EBITDA at -1.89 and -1.94, respectively. Additionally, the Return on Equity (ROE) is alarmingly low at -174.72%, further underscoring the company's financial challenges.
In comparison to its peers, Open Lending Corp. has a less favorable valuation profile, with its EV to EBITDA ratio of -2.0732 standing in stark contrast to Definitive Healthcare Corp.'s positive EV to EBITDA of 12.8619. Other peers like Zuora, Inc. and Everbridge, Inc. also exhibit negative valuations, but Open Lending Corp.'s metrics highlight its riskier position. Notably, the company's stock has underperformed significantly against the S&P 500, with a year-to-date return of -62.14% compared to the index's 12.22%, reinforcing the notion of overvaluation amidst its current financial struggles.