Is Alta Equipment Group, Inc. overvalued or undervalued?

As of 8 May 2024, the valuation grade for Alta Equipment Group, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health and market position. The company appears to be overvalued given its current metrics, particularly with a Price to Book Value of 3.53 and an EV to EBITDA ratio of 7.83, which are significantly higher than those of its peers. Additionally, the ROE stands at a concerning -115.00%, further supporting the notion of overvaluation.
In comparison to its peers, Alta Equipment Group's valuation metrics are less favorable; for instance, Distribution Solutions Group, Inc. has a P/E of 42.30 and an EV to EBITDA of 10.88, while DXP Enterprises, Inc. boasts a P/E of 16.05 and an EV to EBITDA of 9.54. These comparisons highlight that Alta Equipment Group is not only underperforming but is also priced higher relative to its financial performance. Moreover, the company's recent stock performance shows a significant decline of 32.65% over the past year, contrasting sharply with the S&P 500's gain of 10.26% during the same period, reinforcing the view that it is overvalued.