Is Aveanna Healthcare Holdings, Inc. overvalued or undervalued?

As of 28 March 2022, the valuation grade for Aveanna Healthcare Holdings, Inc. moved from does not qualify to risky. The company appears to be overvalued based on its current metrics. The P/E ratio stands at 25, significantly higher than the industry average, while the EV to EBITDA ratio is 11.90, indicating a premium valuation. Additionally, the PEG ratio is exceptionally low at 0.01, suggesting that the stock may not be justified at its current price given its growth prospects.
In comparison to peers, Aveanna's P/E ratio of 31.16 is notably higher than Pediatrix Medical Group, Inc., which has a P/E of 9.83 and is rated very attractive. The Pennant Group, Inc. also presents a more favorable valuation with a P/E of 26.98 and a fair rating. Furthermore, Aveanna's stock has outperformed the S&P 500 significantly over the past year, returning 59.92% compared to the index's 17.14%, which may reflect investor optimism despite the high valuation metrics.