I like to look for good value for money in the FTSE250. I find that there is always an interesting business to explore and evaluate on its merits.

One area that intrigues me at the moment is the technology sector. Tech has been trending for a while now and this mid-sized UK stock is no exception.

The company in question is Raspberry Pi (LSE:RPI). The low-cost computer maker only listed over the summer, but its share price has soared.

This got me thinking: is there still value at the current stock price?

Economic model

At first glance, the Raspberry Pi business model is quite simple. It makes small, inexpensive computers that can be used in areas such as education, hobby projects, and industrial applications.

I’ve personally purchased and experimented with one before when I was younger and find the whole offering really interesting.

What started as a small single board computer (SBC) intended for educational purposes quickly became one of the FTSE 250’s hottest stocks.

I also believe that having a strong brand and a leading market position could be a real growth driver for the future of the company.

Plea for growth

You might not think that there are many use cases for small computers. Investors appear excited about the potential use cases of artificial intelligence (AI), machine learning and the Internet of Things (IoT).

A quick internet search shows many videos of people creating their own Large Language Models (LLMs) and other AI-related projects using these devices.

If the AI ​​revolution lives up to the hype, then I think Raspberry Pi can grow quickly. The company and the technology itself have demonstrated flexibility and adaptability in various commercial and industrial applications.

For example, Raspberry Pi computers have been used for weather monitoring and robotics, and even for data logging on the International Space Station (ISS).

Assessment

The company was only listed in June, but the Raspberry Pi stock price has been rising lately. In fact, shares in the technology company are up 24.5% from the IPO price of 280p per share.

Since the company entered the mid-cap index, I thought the current relative valuation should be considered. Raspberry Pi has a price/earnings ratio (P/E) of 27.8 times. That’s nearly double the 14 times average for the broader index.

Other FTSE 250 tech stocks like Sweet cat trade in 28.6 times the winnings. This is arguably a more useful comparison given the significant potential of good tech stocks.

Despite this, the Raspberry Pi’s high multiple requires future growth and serious cash flow to justify it.

The judgment

I won’t buy a Raspberry Pi at the moment. I think there are certainly opportunities for growth and increasing use of artificial intelligence and broader industrial applications.

However, I’m wary of the stock’s post-IPO frenzy. If I take a Foolish, long term From this perspective, I think there is too much uncertainty about generating the kind of growth needed to justify a price-to-earnings ratio of 27.8 times.

This could become the next Nvidiaor AI fever could be a bubble, in which case I think Raspberry Pi might struggle to justify the current stock price.

For me, this is one I’ll return to after being publicly traded for another six to 12 months.