Is Cross Country Healthcare, Inc. overvalued or undervalued?

As of 6 November 2024, the valuation grade for Cross Country Healthcare, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company is currently considered overvalued, particularly given its negative return on capital employed (ROCE) of -1.62% and return on equity (ROE) of -0.65%. Key valuation ratios include a price-to-book value of 1.01, an EV to EBITDA ratio of 26.84, and an EV to sales ratio of 0.27, which suggest that the company is not generating sufficient returns relative to its valuation.
When compared to peers, Cross Country Healthcare's EV to EBITDA ratio of 26.84 is significantly higher than AMN Healthcare Services, Inc. at 7.71 and Kforce, Inc. at 33.55, indicating a premium valuation despite its losses. Additionally, the company's stock has underperformed against the S&P 500, with a year-to-date return of -24.78% compared to the index's 12.22%, reinforcing the notion that it may be overvalued in the current market environment.