Is Avis Budget Group, Inc. overvalued or undervalued?

As of 1 November 2021, the valuation grade for Avis Budget Group, Inc. has moved from expensive to risky, indicating a shift in perception regarding its valuation. The company appears to be overvalued at this time. Key ratios include a P/E ratio of 31, an EV to EBIT of 16.05, and a negative Price to Book Value of -4.98, which raises concerns about its financial health and sustainability.
In comparison to its peers, Avis Budget Group's P/E ratio of 31.86 is significantly higher than AerCap Holdings NV, which has a P/E of 10.43, and Blue Owl Capital Corp., which stands at 11.29. This disparity suggests that Avis is trading at a premium relative to its peers without a corresponding justification in terms of growth or profitability. Additionally, while the company has shown strong returns over the past year, outperforming the S&P 500, the underlying valuation metrics indicate that it may not be a sound investment at current levels.