Is Blue Foundry Bancorp overvalued or undervalued?

As of 26 July 2023, Blue Foundry Bancorp's valuation grade has moved from fair to risky, indicating a significant shift in its financial outlook. The company appears to be overvalued, particularly given its negative earnings performance and troubling ratios. The price-to-book value stands at 0.60, while the EV to EBITDA ratio is an alarming -39.36, reflecting the company's struggles in generating positive cash flows. Additionally, the return on equity (ROE) is at -3.60%, underscoring the challenges it faces in delivering shareholder value.
In comparison to its peers, Blue Foundry Bancorp's valuation metrics are concerning. For instance, Capitol Federal Financial, Inc. has a P/E ratio of 14.60 and is rated very attractive, while TrustCo Bank Corp. NY is rated fair with a P/E of 11.91. This stark contrast highlights the potential overvaluation of Blue Foundry Bancorp, especially as it lags behind its peers in profitability and growth metrics. Recent stock performance shows that while the company has had a 1-year return of 9.55%, it still underperforms compared to the S&P 500's 10.26% return, reinforcing the notion that it may not be a sound investment at its current price.