Is ICU Medical, Inc. overvalued or undervalued?

As of 7 November 2022, the valuation grade for ICU Medical, Inc. moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued, particularly given its high EV to EBITDA ratio of 13.71 and a Price to Book Value of 1.65, which suggests that investors are paying a premium relative to the company's assets. Additionally, the latest ROCE stands at a mere 3.62%, highlighting inefficiencies in generating returns from capital employed.
When compared to peers, ICU Medical's valuation metrics are concerning; for instance, Globus Medical, Inc. has a much lower EV to EBITDA of 12.32 and a more favorable P/E ratio of 18.37, while Sanmina Corp. shows a strong EV to EBITDA of 22.21. The stock has underperformed against the S&P 500, with a year-to-date return of -14.27% compared to the index's 12.22%, and a staggering 5-year return of -32.99% versus 96.61% for the S&P 500. This performance reinforces the notion that ICU Medical is currently overvalued in the market.