Is PennyMac Mortgage Investment Trust overvalued or undervalued?

As of 27 April 2023, the valuation grade for PennyMac Mortgage Investment Trust has moved from does not qualify to very attractive, indicating a significant improvement in its perceived value. The company appears undervalued, supported by a P/E ratio of 3, a price-to-book value of 0.57, and an EV to EBITDA ratio of 0.57. In comparison to peers, PennyMac's P/E ratio is notably lower than The GEO Group, Inc. at 32.63 and Uniti Group, Inc. at 50.89, highlighting its relative attractiveness in the market.
Despite its appealing valuation metrics, PennyMac has struggled with stock performance, showing a one-year return of -14.46% compared to the S&P 500's 17.14%, and a three-year return of -17.97% against the benchmark's 70.41%. This disparity underscores the potential for value realization as the market may eventually correct the current undervaluation of the stock.