Is LendingTree, Inc. overvalued or undervalued?

As of 3 November 2022, LendingTree, Inc. moved from an expensive to a risky valuation grade, indicating a shift in perception regarding its financial health and market position. The company is currently considered overvalued. Key ratios include a Price to Book Value of 5.61, an EV to EBIT of 18.87, and an EV to EBITDA of 12.86, which suggest that the company's valuation metrics are not aligned with its financial performance.
In comparison to its peers, LendingTree's P/E ratio is notably negative at -15.53, while competitors such as Willis Lease Finance Corp. and Velocity Financial, Inc. have P/E ratios of 8.73 and 9.78, respectively, indicating a more favorable valuation. Additionally, LendingTree's ROE stands at -33.88%, which further emphasizes its struggles relative to peers. The company's stock has underperformed against the S&P 500 over various time frames, particularly with a year-to-date return of -8.10% compared to the S&P 500's 2.44%, reinforcing the notion of overvaluation.