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, with a P/E ratio of 83, a Price to Book Value of 4.19, and an EV to EBITDA of 49.02. In comparison, peers such as Fabrinet and Skyworks Solutions, Inc. have P/E ratios of 41.84 and 20.61, respectively, highlighting the significant premium Power Integrations commands.
The company's recent stock performance has been underwhelming, with a year-to-date return of -26.29%, contrasting sharply with the S&P 500's positive return of 13.30% during the same period. This trend of underperformance continues over longer time frames, with a 5-year return of -24.63% compared to the S&P 500's impressive 91.29%. Overall, the elevated valuation ratios and poor relative stock performance suggest that Power Integrations, Inc. is overvalued in the current market environment.