Is Paragon Finance overvalued or undervalued?

As of 10 October 2025, the valuation grade for Paragon Finance has moved from expensive to very expensive. This indicates a significant shift in the company's perceived value, suggesting it is currently overvalued. The key ratios highlight this concern, with a PE ratio of 22.40, an EV to EBITDA of -21.58, and a ROE of only 2.32%.
When comparing Paragon Finance to its peers, Bajaj Finance has a much higher PE ratio of 36.56, while Life Insurance stands out with a more attractive valuation at a PE of 11.65. The stark contrast in these ratios reinforces the notion that Paragon Finance is not only overvalued but also significantly out of sync with its industry peers. Despite a strong performance over the past three years, with a return of 146.26%, the recent trend shows a decline in year-to-date returns of -22.50%, further emphasizing the overvaluation sentiment.