Is Latham Group, Inc. overvalued or undervalued?

As of 4 March 2025, the valuation grade for Latham Group, Inc. has moved from expensive to risky, indicating a significant shift in its financial outlook. The company is currently assessed as overvalued. Key ratios reveal a Price to Book Value of 1.79, an EV to EBIT of 53.38, and an EV to EBITDA of 15.05, all of which suggest that the company's valuation metrics are not aligned with its financial performance.
In comparison to its peers, Latham Group's EV to EBITDA ratio of 14.78 is notably higher than Daktronics, Inc. at 8.68 and Omega Flex, Inc. at 12.99, both of which are categorized as fairly valued. Additionally, Latham's negative ROE of -3.45% and low ROCE of 2.72% further underscore its financial struggles. Despite a strong one-year return of 68.51% compared to the S&P 500's 10.26%, the overall valuation metrics indicate that Latham Group, Inc. is currently overvalued in the market.