Is Atlantic American Corp. overvalued or undervalued?

As of 9 February 2024, the valuation grade for Atlantic American Corp. has moved from attractive to risky, indicating a significant deterioration in its financial outlook. The company is currently considered overvalued, particularly given its negative P/E ratio of -28.10 and a high EV to EBITDA ratio of 39.03, which suggests that investors are paying a premium for earnings that are not currently being generated. Additionally, the Price to Book Value stands at 0.38, which is low, but in the context of its overall financial performance, it does not compensate for the risks involved.
In comparison to peers, Atlantic American Corp. is underperforming against Donegal Group, Inc., which has a more favorable P/E ratio of 10.48 and is rated as attractive. Other peers like Skyward Specialty Insurance Group, Inc. are considered expensive with a P/E of 19.07, highlighting the relative risk associated with Atlantic American Corp. Furthermore, while the company has shown positive returns over the past year (25.00%), its long-term performance has been lackluster, particularly over three years with a decline of -29.42%, contrasting sharply with the S&P 500's return of 58.74% during the same period.