Is Alight, Inc. overvalued or undervalued?

As of 21 February 2023, Alight, Inc. has moved from a fair to risky valuation grade. The company appears to be overvalued, particularly given its high EV to EBIT ratio of 75.85 and a Price to Book Value of 0.73, which suggests that the market is pricing the stock at a premium relative to its book value. Additionally, its EV to EBITDA ratio stands at 10.20, indicating that investors may be overestimating future earnings potential.
In comparison to its peers, Alight's valuation metrics are concerning; for instance, CACI International, Inc. has a more reasonable EV to EBITDA of 23.43, while Pegasystems, Inc. shows a lower P/E of 48.13. Furthermore, Alight's recent stock performance has been poor, with a year-to-date return of -50.58%, significantly underperforming the S&P 500's gain of 12.22% during the same period, reinforcing the notion that the stock is overvalued.