Is Vital Energy, Inc. overvalued or undervalued?

As of 19 February 2025, the valuation grade for Vital Energy, Inc. has moved from expensive to risky, indicating a shift in perception regarding its valuation. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 2, which is significantly lower than the peer Core Laboratories, Inc. with a P/E of 22.72. Additionally, the Price to Book Value stands at 0.25, and the EV to EBITDA ratio is 2.42, further suggesting that the stock may not be a sound investment at its current price.
In comparison to its peers, Vital Energy's valuation metrics reflect a concerning position within the industry, especially when contrasted with Core Laboratories, which is classified as very expensive. The company's recent stock performance has been poor, with a year-to-date return of -47.09% compared to the S&P 500's 12.22%, and a three-year return of -76.01% versus the S&P 500's 70.41%. This stark contrast reinforces the notion that Vital Energy, Inc. is overvalued at present.