Is PDF Solutions, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for PDF Solutions, Inc. has moved from expensive to attractive, indicating a shift towards a more favorable assessment. The company appears to be undervalued, particularly given its current P/E ratio of 667, which is significantly higher than its peer PROS Holdings, Inc. at -72.87, and its EV to EBITDA ratio of 159.38, which is also elevated compared to TTEC Holdings, Inc. at 6.38. Additionally, the EV to Capital Employed stands at 3.63, suggesting a high valuation relative to the capital used in the business.
In terms of performance, PDF Solutions has shown strong short-term returns, with a 1-week return of 9.44% compared to the S&P 500's 1.70%, and a 1-month return of 36.94% against the S&P 500's 0.96%. However, its longer-term performance has lagged, with a 1-year return of -8.22% compared to the S&P 500's 14.08%. Overall, while the company shows signs of being undervalued based on its recent grade change and valuation ratios, its inconsistent performance against broader market benchmarks suggests caution.