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 in perception towards the stock's value. The company appears to be overvalued based on its high P/E ratio of 667, which is significantly above the peer average of 983.40 for similar companies like PROS Holdings, Inc. and TTEC Holdings, Inc. Additionally, the EV to EBITDA ratio stands at 159.38, further supporting the notion of overvaluation in comparison to its peers.
Despite the attractive grade change, PDF Solutions, Inc. shows concerning financial metrics, including a negative ROCE of -0.25% and a low ROE of 0.57%. The EV to Capital Employed ratio of 3.63 also suggests inefficiency in utilizing capital. While the stock's recent performance against the S&P 500 is not available, the high valuation ratios indicate that investors should approach this stock with caution, as it may not reflect sustainable growth potential.