Is Battalion Oil Corp. overvalued or undervalued?

As of 31 March 2025, Battalion Oil Corp. has moved from an attractive to a risky valuation grade, indicating a significant deterioration in its financial standing. The company is currently assessed as overvalued, particularly given its negative price-to-book value of -12.52 and a high EV to EBITDA ratio of 5.70. Additionally, the return on capital employed (ROCE) stands at a mere 2.91%, which is concerning for potential investors.
In comparison to its peers, Battalion Oil Corp. shows a stark contrast with SilverBow Resources, Inc., which has a P/E ratio of 5.01 and an EV to EBITDA of 3.93, indicating a more favorable valuation. Other peers like Vitesse Energy, Inc. present a very attractive valuation with a P/E of 38.88 and an EV to EBITDA of 7.49. The recent stock performance of Battalion Oil Corp. has also been underwhelming, with a one-year return of -34.38%, significantly lagging behind the S&P 500's 10.26% return, further reinforcing the notion that the stock is overvalued in its current state.