Is KLX Energy Services Holdings, Inc. overvalued or undervalued?

As of 7 May 2024, KLX Energy Services Holdings, Inc. has moved from a fair to a risky valuation grade, indicating a deteriorating outlook. The company appears to be overvalued, particularly given its negative price-to-book value of -1.34 and an EV to EBIT ratio of -15.51, which suggests significant operational challenges. Additionally, the EV to EBITDA ratio stands at 3.76, which is relatively low compared to its peers, indicating that the market may not be valuing the company's earnings potential appropriately.
In comparison to its peers, SilverBow Resources, Inc. has a P/E ratio of 5.01 and an EV to EBITDA of 3.93, while Granite Ridge Resources, Inc. shows a very attractive P/E of 11.32 and an EV to EBITDA of 3.04. This highlights that KLX Energy Services is lagging behind its competitors in terms of valuation metrics. Furthermore, the company's stock has significantly underperformed against the S&P 500, with a year-to-date return of -63.86% compared to the index's gain of 12.22%, reinforcing the perception of overvaluation.