Is Pure Cycle Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Pure Cycle Corp. has moved from attractive to fair. The company appears to be fairly valued based on its current metrics, with a P/E ratio of 17, an EV to EBITDA of 17.68, and a PEG ratio of 0.15, indicating potential growth at a reasonable price. In comparison, peers such as Artesian Resources Corp. have a P/E of 15.08, while Aris Water Solutions, Inc. shows a higher P/E of 21.89, suggesting that Pure Cycle Corp. is positioned competitively within its industry.
Despite the fair valuation, the company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -13.49% compared to the index's 13.30%. This underperformance over the short term may raise concerns for investors, but the valuation ratios indicate that the company is not overvalued at its current price of 10.97.