Is FG Financial Group, Inc. overvalued or undervalued?

As of 9 November 2023, FG Financial Group, Inc. has moved from an attractive to a risky valuation grade. The company appears to be overvalued given its financial metrics, particularly with a Price to Book Value of 0.33 and an EV to Sales ratio of 0.49, which suggest that the market may be pricing in more value than the company can deliver. Additionally, the company has a negative ROE of -41.56%, indicating significant losses relative to shareholder equity.
When compared to peers, FG Financial's valuation ratios are notably weaker; for instance, Heritage Insurance Holdings, Inc. has a P/E ratio of 9.55, while American Coastal Insurance Corp. shows an EV to EBITDA of 32.02, both indicating more favorable valuations in the industry. The stock has significantly underperformed against the S&P 500, with a year-to-date return of -62.34% compared to the index's 12.22%, reinforcing the notion that FG Financial is overvalued in its current state.