Is Prism Finance overvalued or undervalued?

As of 29 August 2025, Prism Finance's valuation grade has moved from risky to very expensive, indicating a significant deterioration in its investment appeal. The company is currently deemed overvalued. Key ratios highlight this concern, with a PE ratio of -10.36, an EV to EBITDA of -4.89, and a ROE of -8.04%. These figures suggest that the company is struggling to generate profits and is not performing well compared to its peers.
In comparison to its industry peers, Prism Finance stands out unfavorably. For instance, Bajaj Finance has a PE ratio of 31.3, while Life Insurance boasts a PE of 11.08, both indicating stronger valuations. Additionally, Prism's EV to Sales ratio of 2.01 is significantly higher than that of Life Insurance at 8.57, further emphasizing its overvaluation. Notably, while Prism Finance has seen a 5% return over the past week, its year-to-date performance shows a decline of 35.68%, contrasting sharply with the Sensex's positive return of 2.14% during the same period.