Is Red Violet, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Red Violet, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is considered overvalued based on its current metrics. Key ratios include a P/E ratio of 74, a Price to Book Value of 6.93, and an EV to EBITDA of 30.15, all of which are substantially higher than typical industry benchmarks.
In comparison with peers, Red Violet, Inc. has a notably high P/E ratio of 82.07, while Perfect Corp. shows a more reasonable P/E of 32.53, highlighting the disparity in valuation within the sector. Additionally, Bandwidth, Inc. and 8x8, Inc. are both classified as risky, with negative P/E ratios, further emphasizing Red Violet's elevated valuation. Despite its strong recent performance, with a 1Y return of 76.70% compared to the S&P 500's 17.14%, the company's high valuation ratios suggest that it may not sustain this growth in the long term.