Is Latham Group, Inc. overvalued or undervalued?

As of 4 March 2025, Latham Group, Inc. has moved from a fair to a risky valuation grade, indicating a potential overvaluation. The company appears overvalued given its high EV to EBITDA ratio of 15.05 and a Price to Book Value of 1.79, especially when compared to peers like Armstrong World Industries, Inc. with a P/E of 38.75 and Brady Corp. with a P/E of 21.28. Additionally, Latham's ROE is negative at -3.45%, further highlighting its financial struggles.
In terms of performance, Latham Group's stock has returned 21.74% over the past year, outperforming the S&P 500's 17.14% return, but it lags behind the index over longer periods, such as the 3-year return of 61.32% compared to the S&P 500's 70.41%. Overall, the combination of high valuation ratios and negative returns suggests that Latham Group is currently overvalued.