Is Copa Holdings SA overvalued or undervalued?

As of 7 August 2024, Copa Holdings SA has moved from an attractive to a very attractive valuation grade. The company is currently undervalued, with a P/E ratio of 8, significantly lower than the industry average, which is reflected in its PEG ratio of 0.80. Additionally, Copa's EV to EBITDA stands at 5.16, indicating strong earnings relative to its valuation.
In comparison to its peers, Copa Holdings SA shows a more favorable position; for instance, Alaska Air Group has a P/E ratio of 10.04 and an EV to EBITDA of 5.57, while SkyWest, Inc. is even higher at a P/E of 19.09. These metrics suggest that Copa Holdings is trading at a discount relative to its competitors. Despite a recent dip in stock performance over the last month compared to the S&P 500, the company's strong return on equity (ROE) of 24.48% and return on capital employed (ROCE) of 23.13% reinforce its undervaluation narrative.