Is HomeStreet, Inc. overvalued or undervalued?

As of 30 October 2023, the valuation grade for HomeStreet, Inc. has moved from very attractive to risky. This shift indicates that the company is currently overvalued. Key ratios reflect this precarious position, with a Price to Book Value of 0.61, an EV to EBIT of -9.75, and an ROE of -35.26%. The negative earnings metrics further highlight the challenges the company faces.
In comparison to its peers, HomeStreet, Inc. stands out unfavorably. For instance, ChoiceOne Financial Services, Inc. has a P/E ratio of 16.34, while Colony Bankcorp, Inc. boasts a more attractive valuation with a P/E of 10.42. The stark contrast in these ratios suggests that HomeStreet is not only underperforming but also positioned at a higher risk level relative to its competitors. Additionally, despite a recent uptick in stock performance, the long-term returns have significantly lagged behind the S&P 500, reinforcing the notion of overvaluation.