Is Coty, Inc. overvalued or undervalued?

As of 6 May 2025, Coty, Inc. has moved from a fair to a risky valuation grade. The company appears to be overvalued based on its current financial metrics. Key ratios include a P/E ratio of 24, an EV to EBIT of 15.34, and a Price to Book Value of 1.35. In comparison to its peers, Coty has a P/E ratio of 23.15, which is slightly lower than The Clorox Co. at 23.58 but significantly lower than e.l.f. Beauty, Inc. at 62.87, indicating that while Coty is not the most expensive, it still faces challenges in justifying its valuation.
The company's return performance has been notably poor, with a year-to-date decline of 30.75% compared to a modest 2.44% gain in the S&P 500, and a staggering 51.46% drop over the past year. This underperformance, coupled with its risky valuation grade, suggests that Coty, Inc. is currently overvalued in the market.