Is Premier, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Premier, Inc. moved from expensive to very expensive, indicating a significant deterioration in its valuation outlook. The company is overvalued based on its current financial metrics. Key ratios include a P/E ratio of 14, an EV to EBITDA of 13.73, and a PEG ratio of 0.19, which suggest that the stock is priced higher relative to its earnings growth potential compared to peers.
In comparison to its peers, Universal Health Services, Inc. has a P/E of 9.20 and an EV to EBITDA of 6.78, while Chemed Corp. shows a much higher P/E of 56.91, indicating a wide disparity in valuation within the industry. Notably, Premier, Inc. has underperformed against the S&P 500 over the long term, with a 3-year return of -24.08% compared to the S&P 500's 70.41%, reinforcing the notion that the stock is currently overvalued.