Is Clearway Energy, Inc. overvalued or undervalued?

As of 22 February 2024, the valuation grade for Clearway Energy, Inc. has moved from very attractive to risky, indicating a shift in perception regarding its investment potential. The company appears overvalued based on its current financial metrics, with a Price to Book Value of 3.14 and an EV to EBIT ratio of 50.24, which suggests high valuation relative to earnings before interest and taxes. Additionally, the EV to EBITDA ratio stands at 11.94, further supporting the notion of overvaluation compared to its peers.
In comparison to its industry peers, Clearway Energy's valuation metrics are concerning; for instance, Brookfield Infrastructure Partners LP has a more favorable EV to EBITDA of 7.9175, while ReNew Energy Global Plc shows a PEG ratio of 0.0819, indicating better growth prospects. Over the past year, Clearway Energy has underperformed significantly against the S&P 500, with a return of -4.06% compared to the index's 17.14%, reinforcing the view that the stock is currently overvalued.