Is Embecta Corp. overvalued or undervalued?

As of 13 May 2022, the valuation grade for Embecta Corp. moved from does not qualify to risky, indicating a shift in perception regarding its financial health. The company is currently considered undervalued, particularly given its low P/E ratio of 6, a PEG ratio of 0.28, and an EV to EBITDA of 7.04. These ratios suggest that the stock may be trading below its intrinsic value compared to its earnings potential.
In comparison to peers, Embecta Corp. has a significantly lower P/E ratio than LeMaitre Vascular, Inc., which stands at 43.25, and MiMedx Group, Inc., at 21.59. While the industry appears to be performing better, Embecta's high ROCE of 38.19% indicates strong capital efficiency despite its negative book value. Notably, the company's stock has underperformed against the S&P 500, with a year-to-date return of -52.45%, which further emphasizes its current undervaluation in the market.