Is Culp, Inc. overvalued or undervalued?

As of 29 June 2022, Culp, Inc. has moved from a very attractive to a risky valuation grade, indicating a significant deterioration in its financial outlook. The company is currently considered overvalued, given its negative earnings and troubling financial ratios. The price-to-book value stands at 0.87, while the EV to EBITDA ratio is -8.44, reflecting substantial losses and a lack of profitability.
In comparison to its peers, Culp, Inc. has a P/E ratio of -3.52, while Unifi, Inc. shows a P/E of -2.35, both indicating challenging financial conditions. Additionally, the company's return on capital employed (ROCE) is at -20.78%, and return on equity (ROE) is at -23.44%, further underscoring its struggles. The stock has underperformed relative to the S&P 500, with a year-to-date return of -35.60% compared to the index's 2.44%, reinforcing the notion that Culp, Inc. is currently overvalued.