Is PDF Solutions, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for PDF Solutions, Inc. moved from expensive to attractive, indicating a shift towards a more favorable assessment. The company appears to be undervalued, especially when considering its high P/E ratio of 667, which is significantly above its peers like PROS Holdings, Inc. at -72.87 and TTEC Holdings, Inc. at -43.49. Additionally, PDF Solutions has an EV to EBITDA ratio of 159.38, which, while high, is more favorable compared to the negative ratios of its peers, suggesting potential for improvement.
In terms of returns, PDF Solutions has outperformed the S&P 500 in the short term, with a 1-week return of 9.44% compared to the S&P 500's 1.70%. However, over longer periods, such as the 1-year and 3-year marks, the stock has lagged behind the index, with returns of -8.22% and 23.57%, respectively. This mixed performance underscores the potential for growth, aligning with the attractive valuation grade despite the high P/E ratio.