Is Power Integrations, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Power Integrations, Inc. has moved from attractive to very expensive, indicating a shift towards overvaluation. The company is currently considered overvalued based on its high P/E ratio of 83, a Price to Book Value of 4.19, and an EV to EBITDA of 49.02, all of which significantly exceed those of its peers. For instance, Fabrinet has a P/E of 41.84 and Skyworks Solutions, Inc. has an EV to EBITDA of 10.27, highlighting the premium at which Power Integrations is trading.
In terms of performance, Power Integrations has underperformed compared to the S&P 500 across multiple time frames, with a year-to-date return of -26.29% versus the S&P 500's 13.30%. This trend continues over longer periods, with a 5-year return of -24.63% compared to the S&P 500's impressive 91.29%. Overall, the combination of high valuation ratios and poor relative performance suggests that Power Integrations, Inc. is overvalued.