Is Palmer Square Capital BDC Inc. overvalued or undervalued?

As of 27 February 2025, the valuation grade for Palmer Square Capital BDC Inc. moved from expensive to very attractive, indicating a significant improvement in its valuation outlook. The company appears undervalued, with a P/E ratio of 27, a Price to Book Value of 0.87, and an EV to EBIT of 5.25, which are favorable compared to its peers. For instance, a comparable firm has a P/E of 24.20 and an EV to EBITDA of 5.11, suggesting that Palmer Square Capital may offer a better value proposition.
Despite the attractive valuation metrics, the company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -10.66% compared to the index's 12.22%. This underperformance reinforces the notion that the stock may be undervalued, presenting a potential opportunity for investors.