Is Babcock & Wilcox Enterprises, Inc. overvalued or undervalued?

As of 8 November 2022, the valuation grade for Babcock & Wilcox Enterprises, Inc. moved from expensive to risky, indicating a shift in perception regarding its market value. The company appears to be overvalued given its negative price-to-book value of -0.42 and a high EV to EBITDA ratio of 8.58, suggesting that investors are paying a premium relative to its earnings before interest, taxes, depreciation, and amortization. Additionally, the EV to Sales ratio of 0.72 reinforces this notion, as it indicates that the company's sales do not justify its current enterprise value.
In comparison to its peers, Babcock & Wilcox's EV to EBITDA ratio of 11.39 is significantly lower than Transcat, Inc.'s 20.3290, which is classified as very expensive, while FuelCell Energy, Inc. is also categorized as risky with a negative EV to EBITDA. This peer comparison further emphasizes the relative overvaluation of Babcock & Wilcox. Notably, the company's stock has outperformed the S&P 500 in recent periods, with a 1-year return of 170.77% compared to the S&P 500's 17.14%, suggesting strong short-term momentum despite its overall valuation concerns.