Is CrossAmerica Partners LP overvalued or undervalued?

As of 8 May 2024, the valuation grade for CrossAmerica Partners LP has moved from very attractive to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued, particularly given its P/E ratio of 8, which is below the peer average of approximately 8.77, and its negative price-to-book value of -14.82, suggesting significant concerns about its asset valuation. Additionally, the EV to EBITDA ratio stands at 7.89, which, while lower than the industry average, still raises red flags about operational efficiency.
In comparison to its peers, such as the average P/E of 8.77 and an EV to EBITDA of 8.94, CrossAmerica Partners LP shows weaker fundamentals. The company's recent stock performance has lagged significantly behind the S&P 500, with a year-to-date return of -2.86% compared to the S&P 500's 12.22%, and a 5-year return of 34.07% versus the S&P 500's impressive 96.61%. This underperformance reinforces the notion that the stock may not be a favorable investment at its current valuation.