Is Ambac Financial Group, Inc. overvalued or undervalued?

As of 12 November 2024, the valuation grade for Ambac Financial Group, Inc. has moved from attractive to risky, indicating a significant shift in perception regarding the company's financial health. The company is currently deemed overvalued, particularly given its negative P/E ratio of -13.38 and a low price-to-book value of 0.42. Additionally, the EV to EBITDA ratio stands at 5.37, which, while not excessively high, does not compensate for the overall risk profile presented by the company.
In comparison to its peers, Tiptree, Inc. is classified as expensive with a P/E ratio of 16.83 and Investors Title Co. is rated fair with a P/E of 15.03. This highlights the stark contrast in valuation metrics, suggesting that Ambac is not only underperforming relative to its peers but also reflects a concerning trend with a year-to-date stock return of -45.77%, significantly lagging behind the S&P 500's return of 2.44%. Overall, these factors reinforce the conclusion that Ambac Financial Group, Inc. is overvalued in the current market environment.