Is SMART Global Holdings, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for SMART Global Holdings, Inc. has moved from attractive to expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on its current P/E ratio of 37, which is significantly higher than the industry average, and an EV to EBITDA ratio of 8.11, which is also elevated compared to peers like Tower Semiconductor Ltd. with a P/E of 37.63 and Semtech Corp. at a P/E of 70.91. Additionally, the Price to Book Value stands at 1.71, suggesting that the stock may not be justified at its current price level.
In terms of performance, SMART Global Holdings has shown a 34.61% return over the past year, outperforming the S&P 500's 14.08% return, but its longer-term performance has lagged behind the index, particularly over the 3-year and 5-year periods. This discrepancy suggests that while the company has had a strong recent performance, its valuation metrics indicate that it may not sustain this growth relative to its peers and the broader market.