Is KK Shah Hospital overvalued or undervalued?

As of 2 January 2025, KK Shah Hospital's valuation grade has moved from fair to risky, indicating a significant deterioration in its financial outlook. The company appears to be overvalued based on its current metrics, with a PE ratio of -33.36, an EV to EBITDA of 32.56, and a Price to Book Value of 2.37. These ratios suggest that the market is pricing the stock at a premium despite its negative earnings and poor return on equity of -2.34%. In comparison to its peers, KK Shah Hospital's valuation stands out unfavorably. For instance, Max Healthcare Institute Ltd. has a PE ratio of 100.29, while Apollo Hospitals Enterprise Ltd. shows a PE of 69.03, both indicating a much stronger market position. Additionally, the company's recent stock performance has lagged behind the Sensex, with a 1-year return of -7.08% compared to the Sensex's 7.53%. Overall, KK Shah Hospital is considered overvalued relative to its financial performance and peer group.