Is Paysafe Ltd. overvalued or undervalued?

As of 13 May 2025, the valuation grade for Paysafe Ltd. has moved from fair to risky, indicating a shift towards a more negative outlook. The company appears to be overvalued, particularly when considering its P/E ratio of 56, which is significantly higher than its peers, such as Napco Security Technologies, Inc. with a P/E of 35.88 and BrightView Holdings, Inc. at 17.32. Additionally, Paysafe's EV to EBITDA ratio of 7.34 and a PEG ratio of 0.32 suggest that its valuation metrics do not align favorably with its earnings growth prospects.
In comparison to the S&P 500, Paysafe has underperformed across multiple time frames, with a year-to-date return of -17.66% compared to the S&P 500's 12.22%, and a one-year return of -37.53% versus 17.14% for the index. This stark contrast further reinforces the notion that Paysafe Ltd. is currently overvalued in the market.