Is Perion Network Ltd. overvalued or undervalued?

As of 13 May 2025, the valuation grade for Perion Network Ltd. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued, given its P/E ratio of 205, which is significantly higher than the peer average of -121.28, and an EV to EBITDA ratio of 107.08, which also suggests a premium valuation compared to its peers. Additionally, the Price to Book Value stands at 0.65, indicating that the market is valuing the company's assets at a discount relative to its book value.
In comparison to its peers, Perion Network Ltd. shows a stark contrast with its EV to EBIT ratio of -7.23, which raises concerns about its profitability. Notably, while the company has performed well in the short term with a YTD return of 15.70%, outperforming the S&P 500's 12.22%, its long-term performance has been disappointing, with a 3-year return of -54.03% compared to the S&P 500's 70.41%. This divergence highlights the risks associated with its current valuation and suggests caution for potential investors.