Is Compass Diversified Holdings overvalued or undervalued?

As of 3 May 2023, the valuation grade for Compass Diversified Holdings has moved from very attractive to risky, indicating a significant shift in its perceived value. The company is currently assessed as overvalued given its financial metrics, including a Price to Book Value of 0.42, an EV to EBITDA of 5.98, and a ROCE of 7.91%. In comparison to peers, Victory Capital Holdings, Inc. has a P/E ratio of 15.17 and an EV to EBITDA of 8.80, while Golub Capital BDC, Inc. boasts a P/E of 13.14 and an EV to EBITDA of 6.40, highlighting the disparity in valuation.
The company's financial struggles are evident with a negative ROE of -4.77% and a significant year-to-date stock return decline of -72.23%, contrasting sharply with the S&P 500's modest gain of 2.44%. Overall, Compass Diversified Holdings appears to be overvalued in the current market context, with its performance metrics and peer comparisons suggesting a need for caution among investors.