Is Hawaiian Electric Industries, Inc. overvalued or undervalued?

As of 9 August 2024, the valuation grade for Hawaiian Electric Industries, Inc. has moved from very attractive to risky, indicating a significant shift in its financial outlook. The company is currently considered overvalued, primarily due to its troubling financial ratios, including a price-to-book value of 1.17 and an EV to EBITDA ratio of -2.28, which reflects negative earnings before interest, taxes, depreciation, and amortization. Additionally, the company's return on capital employed (ROCE) stands at a concerning -55.88%, and return on equity (ROE) is at -87.14%, highlighting severe operational inefficiencies.
When comparing Hawaiian Electric to its peers, it is evident that it is lagging behind, with a peer valuation of -1.3173 for EV to EBITDA, indicating that it is not only underperforming but also facing significant challenges relative to the industry. Notable peers in the sector, such as NextEra Energy, have more favorable metrics that further emphasize Hawaiian Electric's struggles. Despite a recent uptick in stock price, with a 1-week return of 4.15% compared to a slight decline in the S&P 500, the long-term performance remains concerning, with a 3-year return of -72.33%, suggesting that investors should approach this stock with caution.