Is Premier, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Premier, Inc. has moved from attractive to very expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on its P/E ratio of 14, which is significantly higher than peers like Universal Health Services, Inc. with a P/E of 9.20 and National HealthCare Corp. at 18.51. Additionally, the EV to EBITDA ratio stands at 13.73, while Surgery Partners, Inc. has a more favorable ratio of 8.44, further highlighting the premium at which Premier is trading.
With a PEG ratio of 0.19, Premier's growth potential does not justify its current valuation, especially when compared to Chemed Corp., which has a PEG of 0.00. The stock has performed well recently, with a YTD return of 32.08% compared to the S&P 500's 13.30%, but its long-term performance has been lackluster, with a 3Y return of -17.89% against the S&P 500's 81.19%. This disparity suggests that while the stock may be experiencing short-term gains, its overall valuation does not align with its financial metrics, reinforcing the conclusion that Premier, Inc. is overvalued.