Is Custom Truck One Source, Inc. overvalued or undervalued?

As of 1 August 2024, the valuation grade for Custom Truck One Source, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health and market position. The company is currently considered overvalued, particularly given its negative return on equity of -2.02% and a price-to-book value of 1.30, which suggests that investors are paying a premium relative to the company's net assets. Additionally, the EV to EBITDA ratio stands at 9.42, which is relatively high compared to its peers.
In comparison to its industry peers, Custom Truck One Source, Inc. has a significantly lower EV to EBITDA ratio than SLM Corp. at 4.32 and Herc Holdings, Inc. at 8.47, both of which are performing better in terms of valuation. Furthermore, the company's year-to-date return of 24.53% outpaces the S&P 500's return of 12.22%, but its longer-term performance over three years shows a decline of -8.83%, contrasting sharply with the S&P 500's gain of 70.41%. This mixed performance reinforces the notion that the stock may be overvalued in light of its financial metrics and peer comparisons.