Is Hooker Furnishings Corp. overvalued or undervalued?

As of 5 December 2024, the valuation grade for Hooker Furnishings Corp. has moved from very attractive to risky, indicating a significant deterioration in its valuation outlook. The company appears to be overvalued, particularly when considering its negative P/E ratio and poor return metrics. Key ratios include a price-to-book value of 0.58, an EV to EBITDA of -22.79, and an EV to sales ratio of 0.35, all of which suggest that the company's financial health is concerning compared to its peers.
In comparison to its industry, Hooker Furnishings Corp. has a much lower EV to EBITDA ratio than peers like Ethan Allen Interiors, Inc. (17.96) and Arhaus, Inc. (8.19), which are both in more favorable valuation positions. Additionally, the company's recent stock performance has been poor, with a year-to-date return of -20.77% compared to the S&P 500's gain of 12.22%, and a staggering -59.39% return over the past five years against the S&P 500's 96.61% increase. This stark contrast reinforces the notion that Hooker Furnishings Corp. is currently overvalued.