Is RadNet, Inc. overvalued or undervalued?

As of 12 May 2025, the valuation grade for RadNet, Inc. has moved from fair to risky, indicating a shift towards a less favorable outlook. The company appears to be overvalued based on its high valuation ratios, including a P/E ratio of 137, an EV to EBITDA of 21.25, and a Price to Book Value of 4.90. In comparison, peers such as Encompass Health Corp. have a significantly lower P/E ratio of 20.94, while The Ensign Group, Inc. shows a P/E of 32.46, both suggesting that RadNet's valuation is not justified relative to its industry.
Despite RadNet's strong historical performance, with a staggering 3-year return of 282.14% compared to the S&P 500's 70.41%, the current valuation metrics indicate that the stock may be priced too high given its earnings potential. Overall, RadNet, Inc. is assessed as overvalued in the current market context.