Is Prism Finance overvalued or undervalued?

As of 19 September 2025, the valuation grade for Prism Finance has moved from very expensive to risky. The company's current valuation indicates it is overvalued, particularly given its negative PE ratio of -10.36 and EV to EBIT of -4.80. Additionally, the ROCE stands at -11.53%, which raises concerns about its operational efficiency and profitability.
In comparison to its peers, Prism Finance's valuation metrics are significantly lower. For instance, Bajaj Finance has a PE ratio of 35.51 and an EV to EBITDA of 19.31, while Life Insurance boasts a PE of 11.64 and an EV to EBITDA of 9.07. These comparisons highlight that Prism Finance is not only underperforming relative to its industry but also suggests that it is not a favorable investment at its current price of 28.37. The company's stock has underperformed the Sensex year-to-date, with a return of -35.68% compared to the Sensex's 5.74%, further reinforcing the notion of overvaluation.