Is Dell Technologies, Inc. overvalued or undervalued?

As of 24 February 2022, the valuation grade for Dell Technologies, Inc. has moved from attractive to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 18, which is higher than the peer average of 10.09 for Hewlett Packard Enterprise Co. and 8.89 for HP, Inc. Additionally, its EV to EBITDA ratio stands at 12.49, which is also above the industry average, suggesting that investors may be paying a premium for its earnings potential.
In comparison to its peers, Dell Technologies, Inc. shows a higher valuation profile, with a notable negative price to book value of -30.90, indicating potential concerns about its asset valuation. The company has delivered a strong return of 248.02% over the past three years, significantly outperforming the S&P 500's return of 70.41% in the same period, which may have contributed to its elevated valuation. However, the recent grade change and the relative valuation metrics suggest caution for potential investors.