Is Zim Laboratories overvalued or undervalued?

As of 17 March 2025, Zim Laboratories has moved from a fair to an attractive valuation grade. The company is currently considered undervalued, with a PE ratio of 40.02, an EV to EBITDA of 13.72, and a Price to Book Value of 1.93. These ratios suggest that the stock is trading at a reasonable valuation compared to its earnings and cash flow generation capabilities.
In comparison to its peers, Zim Laboratories stands out with a PEG ratio of 0.00, indicating potential growth at a low price relative to its earnings growth expectations. Notably, the company’s EV to EBITDA ratio is in line with industry standards, while its PE ratio is comparable to other players in the Pharmaceuticals & Biotechnology sector. Recent stock performance has also been strong, with a 1-week return of 16.18% compared to a 1.39% return for the Sensex, reinforcing the attractiveness of the current valuation.