Is Designer Brands, Inc. overvalued or undervalued?

As of 11 September 2024, Designer Brands, Inc. has moved from a fair to a risky valuation grade, indicating a significant deterioration in its market position. The company is currently assessed as overvalued. Key ratios include a P/E ratio of 25, an EV to EBIT of 20.99, and a Price to Book Value of 1.39, which suggest that the stock is trading at a premium compared to its earnings and asset value.
In comparison to its peers, Designer Brands, Inc. has a notably high P/E ratio compared to OPENLANE, Inc. at 21.56 and V2X, Inc. at 34.35, both of which are classified as fairly valued. Additionally, the company's ROCE of 5.35% and ROE of 5.47% are relatively low, further supporting the notion of overvaluation. Recent stock performance has been poor, with a year-to-date return of -56.74%, significantly underperforming the S&P 500's 2.44% return, reinforcing the concerns around its current valuation.