Is San Juan Basin Royalty Trust overvalued or undervalued?

As of 24 March 2025, the valuation grade for San Juan Basin Royalty Trust has moved from very attractive to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued, with a P/E ratio of 279, an EV to EBIT ratio of 292.28, and an EV to EBITDA ratio of 284.95, all of which are substantially higher than its peers. For instance, WisdomTree, Inc. has a P/E of 17.96 and an EV to EBITDA of 8.99, while Dorchester Minerals LP shows a P/E of 14.36 and an EV to EBITDA of 8.86.
The company's financial metrics suggest that it is trading at a premium compared to its industry, with a Price to Book Value of 111.06 and a ROCE of 38.00%, which, while impressive, does not justify the current valuation in light of the peer comparisons. Additionally, the stock has underperformed against the S&P 500 in the short term, with a 1-week return of -13.62% compared to a slight decline in the index. Overall, the combination of high valuation ratios and peer comparisons leads to the conclusion that San Juan Basin Royalty Trust is overvalued.