Is Outbrain, Inc. overvalued or undervalued?

As of 27 February 2025, the valuation grade for Outbrain, Inc. has moved from expensive to risky, indicating a deterioration in its valuation outlook. Based on the available metrics, the company appears to be overvalued. The Price to Book Value stands at 0.56, while the EV to EBITDA ratio is 27.24, suggesting that the market is pricing the company at a premium relative to its earnings potential. Additionally, the EV to Sales ratio is 0.78, further supporting the notion that the stock is not a bargain at its current price.
In comparison to peers, Outbrain's valuation metrics are concerning; for instance, Red Violet, Inc. has a P/E ratio of 82.07, while Bandwidth, Inc. shows a risky valuation with a P/E of -42.64. The stark contrast in valuation ratios highlights Outbrain's precarious position within its industry. Furthermore, the company's stock has significantly underperformed against the S&P 500, with a year-to-date return of -75.91% compared to the index's 12.22%, reinforcing the view that Outbrain is currently overvalued.