Is HF Foods Group, Inc. overvalued or undervalued?

As of 12 November 2024, HF Foods Group, Inc. has moved from a valuation grade of very attractive to risky. The company is currently considered overvalued, with a P/E ratio of 195, significantly higher than its peers, such as Dole Plc with a P/E of 9.39 and United Natural Foods, Inc. at 14.19. Additionally, the EV to EBITDA ratio stands at 37.60, indicating a premium compared to the industry average.
The company's financial performance reflects troubling metrics, including a ROCE of only 2.37% and an ROE of 0.13%, which are substantially lower than the industry benchmarks. The stark contrast in valuation ratios compared to peers like The Chefs' Warehouse, Inc. (P/E of 41.60) and The Duckhorn Portfolio, Inc. (P/E of 21.99) further underscores the overvaluation concern. Over the past year, HF Foods Group has underperformed against the S&P 500, with a return of -6.87% compared to the index's 10.26%, reinforcing the notion of its current overvaluation.