Is Bausch + Lomb Corp. overvalued or undervalued?

As of 3 May 2023, the valuation grade for Bausch + Lomb Corp. has moved from expensive to risky, indicating a shift in perception regarding its financial health and market position. The company appears to be overvalued, given its Price to Book Value of 0.65 and an EV to EBITDA ratio of 14.88, which suggests that investors are paying a premium despite the company's current losses. Additionally, the ROCE stands at a mere 1.42%, further highlighting the challenges the company faces in generating returns.
In comparison to its peers, Bausch + Lomb's valuation metrics are concerning; for instance, Penumbra, Inc. has a significantly higher P/E ratio of 75.41, while QIAGEN NV, which is considered fairly valued, has a more reasonable EV to EBITDA of 15.05. The company's recent stock performance has also lagged behind the S&P 500, with a year-to-date return of -14.84% compared to the index's gain of 12.22%. Overall, these factors suggest that Bausch + Lomb is currently overvalued in the market.