Is Conn's, Inc. overvalued or undervalued?

As of 6 December 2022, Conn's, Inc. has moved from an attractive to a risky valuation grade, indicating a significant deterioration in its financial outlook. The company is currently overvalued, as evidenced by its negative P/E ratio of -0.0001 and an alarming EV to EBITDA ratio of -56.10, which suggests that the market is pricing in substantial risks. Additionally, the return on capital employed (ROCE) stands at -7.21%, and return on equity (ROE) is at -9.07%, both of which reflect poor profitability and efficiency.
When compared to peers, Conn's, Inc. lags significantly behind Hamilton Beach Brands Holding Co., which has a fair valuation with a P/E ratio of 6.38 and an EV to EBITDA of 5.01. Polished.com, Inc. also shows a risky valuation with a negative EV to EBITDA of -11.31. The stark contrast in performance and valuation metrics among these companies highlights Conn's overvaluation status. Furthermore, Conn's stock has underperformed dramatically over the past year, with a return of -100%, compared to a 10.26% gain in the S&P 500, reinforcing the notion that it is not a viable investment at this time.