Is Braemar Hotels & Resorts, Inc. overvalued or undervalued?

As of 8 November 2023, Braemar Hotels & Resorts, Inc. has moved from an attractive to a risky valuation grade, indicating a shift in perception regarding its investment potential. The company appears to be overvalued, particularly when considering its elevated P/E ratio of 162 compared to peers like Postal Realty Trust, Inc. at 67.11 and Transcontinental Realty Investors, Inc. at 43.81. Additionally, Braemar's price-to-book ratio stands at 0.24, which, while low, does not offset the high P/E ratio, and its EV to EBITDA ratio of 0.20 further underscores concerns about its valuation.
In terms of performance metrics, Braemar's ROCE is 5.80%, and its ROE is a mere 0.01%, suggesting inefficiencies in generating returns relative to its equity. When compared to its peers, Braemar's PEG ratio of 1.61 also indicates that growth expectations may not justify its current price. The recent stock performance shows a 1-month return of 27.50%, significantly outperforming the S&P 500's 3.83%, but this short-term gain does not alleviate the long-term underperformance reflected in its YTD return of -15.00% and 3-year return of -42.05%. Overall, these factors contribute to the conclusion that Braemar Hotels & Resorts, Inc. is currently overvalued.