Is Repay Holdings Corp. overvalued or undervalued?

As of 10 May 2023, the valuation grade for Repay Holdings Corp. has moved from fair to risky, indicating a deteriorating outlook. The company appears to be overvalued, particularly when considering its P/E ratio of 50, which is significantly higher than the industry average, and an EV to EBITDA ratio of 7.54, suggesting that investors are paying a premium relative to earnings before interest, taxes, depreciation, and amortization. Additionally, the PEG ratio stands at 0.63, which typically indicates undervaluation, but in this context, it does not offset the high P/E ratio.
In comparison to peers, Repay Holdings Corp. has a P/E ratio of 60.36, while PRA Group, Inc. is considered very attractive with a P/E of 6.31, highlighting a stark contrast in valuation. Other peers like SP Plus Corp. are categorized as very expensive with a P/E of 25.27. The recent stock performance also reinforces this valuation concern, as Repay Holdings has underperformed the S&P 500 across multiple periods, with a year-to-date return of -24.64% compared to the S&P 500's 12.22%.