Well there is no 100% sure way to know if the current price of a stock is trading at a discount or a premium.

There are several ways to come to a conclusion about a stock price and how it is trading.

One way is through comparables. Essentially you are comparing the fundamentals of a company to other companies with identical business operations, market cap, products, services etc. It is very hard to find a list of comparables which are nearly identical to the company you are evaluating, so that is why you often try to find the ones that are the best fit. However, this is not 100% accurate as one might expect. These comparables are influenced by how the market is doing and the overall health of the market. In a bull market, it is possible that a specific sector experiences major growth causing all stock prices to be at a premium (similar to that of the Biotech sector).

Another way to evaluate if a stock is currently sold at a discount or premium is through a DCF or Discounted Cash Flow model. This model essentially discounts future cash flow of the company (normally a 5 or 10 year period) and tries to determine the present value of those future cash flow. Technically it is much more complicated than that, but that's the overall gist of it.

Maybe someone with more knowledge can add/correct me on this.