Is Bausch + Lomb Corp. overvalued or undervalued?

As of 3 May 2023, the valuation grade for Bausch + Lomb Corp. moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued given its current metrics, particularly with a P/E ratio that is not applicable due to losses, a Price to Book Value of 0.65, and an EV to EBITDA ratio of 14.88. Additionally, the company's ROE stands at -3.98%, reflecting ongoing profitability challenges.
In comparison to peers, Bausch + Lomb's valuation is significantly lower than its industry counterparts, with a peer average EV to EBITDA around 14.81 and a negative PEG ratio, suggesting that the market is pricing in substantial risk. Notably, the company's stock has underperformed relative to the S&P 500 over various time frames, with a year-to-date return of -33.55% compared to the S&P 500's 2.44%. Overall, these factors support the conclusion that Bausch + Lomb is overvalued in its current market position.