Is PHX Minerals, Inc. overvalued or undervalued?

As of 23 April 2025, the valuation grade for PHX Minerals, Inc. has moved from fair to very expensive. This indicates that the company is currently overvalued. The P/E ratio stands at 17, which is significantly higher than its peers, such as Riley Exploration Permian, Inc. with a P/E of 4.98 and VAALCO Energy, Inc. at 9.99. Additionally, the EV to EBITDA ratio for PHX is 11.68, while its peer TXO Partners LP shows a much higher valuation at 654.66, suggesting a disparity in market expectations.
The PEG ratio for PHX is notably low at 0.08, which usually indicates potential undervaluation; however, the overall metrics and peer comparisons suggest that the market has priced in excessive optimism. With a dividend yield of 88.33% and a ROE of 7.92%, the returns seem attractive, yet they do not justify the current high valuation. Recent stock performance shows a 1-year return of 38.98%, outperforming the S&P 500's 10.26%, but this does not alter the conclusion that PHX Minerals, Inc. is overvalued relative to its peers and industry benchmarks.