Is Eco Hotels overvalued or undervalued?

As of 17 November 2023, the valuation grade for Eco Hotels has moved from does not qualify to risky, indicating a significant shift in its perceived investment quality. The company is currently overvalued, as evidenced by its negative PE ratio of -22.29 and an EV to EBITDA ratio of -17.68, both of which suggest that the market is pricing the stock unfavorably compared to its earnings potential. Additionally, the Price to Book Value stands at 2.33, which is high relative to the industry norms.
In comparison to its peers, Eco Hotels' financial metrics are starkly unfavorable. For instance, K.P.R. Mill Ltd. has a PE ratio of 47.51, while Trident Ltd. presents a PE of 42.6, both indicating a much stronger valuation profile. The company's recent performance has also lagged significantly behind the Sensex, with a year-to-date return of -51.97% compared to the Sensex's 5.62%. Overall, these indicators suggest that Eco Hotels is not only overvalued but also facing substantial operational challenges.