Is Fossil Group, Inc. overvalued or undervalued?

As of 10 November 2022, the valuation grade for Fossil Group, Inc. has moved from fair to risky, indicating a shift towards a more negative outlook. The company appears to be overvalued given its current financial metrics, particularly with a Price to Book Value of 0.56 and an EV to Sales ratio of 0.20, which suggest that the market may not be fully pricing in the company's losses and negative returns on equity (ROE) of -17.45%. Additionally, the EV to EBITDA ratio of 26.43 further highlights potential overvaluation compared to its peers.
In comparison to its industry peers, Fossil Group, Inc. has a significantly higher P/E ratio of 70.89, while Movado Group, Inc. stands at a much more attractive 26.84, indicating that investors are paying a premium for Fossil despite its losses. The company's recent stock performance shows a YTD return of 89.22%, which outpaces the S&P 500's 12.22% return, yet this strong performance is overshadowed by a 5-year return of -61.04%, suggesting that long-term investors may face challenges. Overall, Fossil Group, Inc. is currently overvalued based on its financial ratios and peer comparisons.