Is Reservoir Media, Inc. overvalued or undervalued?

As of 16 June 2025, Reservoir Media, Inc. has moved from an expensive to a very expensive valuation grade. The company appears to be overvalued based on its current metrics, with a P/E ratio of 37, an EV to EBITDA of 13.76, and a PEG ratio of 0.14. These figures suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to peers, Reservoir Media's P/E ratio significantly exceeds that of Cass Information Systems, which stands at 29.86, and is also higher than Franklin Covey Co. at 29.80. Additionally, the company's ROCE of 4.79% and ROE of 3.53% indicate a relatively low return on capital and equity, further supporting the notion of overvaluation. While Reservoir Media has shown a positive return over the past year at 7.51%, it lags behind the S&P 500's return of 10.26%, reinforcing concerns about its current valuation.