Is Kura Sushi USA, Inc. overvalued or undervalued?

As of 9 July 2024, Kura Sushi USA, Inc. has moved from a fair to a risky valuation grade, indicating a shift towards a more negative outlook. The company is currently considered overvalued given its financial metrics, particularly with a P/E ratio of NA due to losses, a Price to Book Value of 4.23, and an EV to EBITDA of 99.58. The return on capital employed (ROCE) stands at -2.70%, and the return on equity (ROE) is also negative at -0.71%, highlighting significant operational challenges.
In comparison to peers, Kura Sushi's valuation metrics are concerning, especially when juxtaposed with Sweetgreen, Inc., which has an EV to EBITDA of -74.68, and Dine Brands Global, Inc., with an EV to EBITDA of 8.34. The stark contrast in these ratios suggests that Kura Sushi is not only underperforming relative to its peers but is also facing a higher level of risk. Despite a recent one-month stock return of 27.04% compared to the S&P 500's 3.83%, the overall valuation suggests that Kura Sushi remains overvalued in the current market environment.