Is Priority Technology Holdings, Inc. overvalued or undervalued?

As of 8 August 2024, the valuation grade for Priority Technology Holdings, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued given its current metrics, including a P/E ratio of 21, a Price to Book Value of -4.27, and an EV to EBITDA ratio of 7.96. In comparison, peers such as Red Violet, Inc. have a significantly higher P/E ratio of 82.07, while Bandwidth, Inc. shows a risky valuation with a P/E of -42.64.
Despite a strong 3-year return of 86.07%, which outperformed the S&P 500's 70.41%, the recent performance has been concerning, with a year-to-date decline of 36.34% compared to the S&P 500's 12.22% gain. This suggests that while the company has had periods of strong growth, its current valuation does not align with its recent performance trends, reinforcing the view that it is overvalued.