Is Capri Holdings Ltd. overvalued or undervalued?

As of 29 May 2024, the valuation grade for Capri Holdings Ltd. has moved from very expensive to risky, indicating a significant shift in its market perception. Based on the current analysis, the company appears to be overvalued. The P/E ratio is not applicable due to losses, while the Price to Book Value stands at 8.72, and the EV to EBITDA is at 19.61, suggesting a high valuation relative to earnings potential.
In comparison to its peers, Tapestry, Inc. has a P/E ratio of 14.99 and an EV to EBITDA of 11.74, while Gap, Inc. shows a more attractive P/E of 9.10 and an EV to EBITDA of 4.72. These ratios highlight that Capri Holdings is positioned unfavorably against its peers, particularly given its negative ROE of -100.82% and a low ROCE of 2.74%. Furthermore, the company's stock has underperformed significantly, with a year-to-date return of -20.32% compared to a 2.44% gain in the S&P 500, reinforcing the notion that Capri Holdings is currently overvalued.