Is Bowlero Corp. overvalued or undervalued?

As of 5 September 2024, Bowlero Corp. has moved from an attractive to a risky valuation grade. The company appears to be overvalued given its current financial metrics. Key ratios include an EV to EBITDA of 9.28 and a negative Price to Book Value of -14.77, indicating significant financial distress. Additionally, the company has a negative ROE, further highlighting its challenges.
In comparison to its peers, Bowlero Corp. stands out with an EV to EBITDA ratio of 9.28, while Cinemark Holdings, Inc. has a more favorable ratio of 11.12, reflecting a healthier valuation. Other risky peers such as Cedar Fair LP and Atlanta Braves Holdings, Inc. also exhibit negative P/E ratios, suggesting that Bowlero is not alone in its struggles, but it remains at a disadvantage. Furthermore, Bowlero's stock has underperformed the S&P 500 over the past year, with a return of -28.12% compared to the index's 10.26%, reinforcing the notion that the company is currently overvalued.