Is ProPetro Holding Corp. overvalued or undervalued?

As of 30 October 2024, the valuation grade for ProPetro Holding Corp. has moved from expensive to risky, indicating a shift in perception regarding its value. The company appears to be undervalued based on its current metrics, with a P/E ratio of 11, a price-to-book value of 0.75, and an EV to EBITDA ratio of 2.71. In comparison, ProFrac Holding Corp., a peer in the same industry, has a P/E ratio of -2.60 and an EV to EBITDA of 4.44, suggesting that ProPetro is relatively more favorably valued despite its risky classification.
The stock has struggled in recent periods, with a year-to-date return of -47.16% compared to a positive 12.22% return for the S&P 500, reflecting significant underperformance. Over the past three years, ProPetro's return of -43.33% starkly contrasts with the S&P 500's 70.41% gain, reinforcing the notion that the stock may be undervalued relative to its peers and the broader market.