Is LendingTree, Inc. overvalued or undervalued?

As of 3 November 2022, LendingTree, Inc. moved from an attractive to a risky valuation grade, indicating a shift towards being overvalued. The company is currently assessed as overvalued, particularly given its high Price to Book Value of 5.61 and an EV to EBITDA ratio of 12.86, which are significantly above industry norms. Additionally, the company's return on equity (ROE) stands at a concerning -33.88%, highlighting operational challenges.
In comparison to its peers, LendingTree's valuation metrics are less favorable; for instance, Willis Lease Finance Corp. has a much lower EV to EBITDA of 9.81 and a P/E ratio of 7.08, reflecting a more attractive investment profile. Despite recent strong performance, with a year-to-date return of 97.45% compared to the S&P 500's 12.22%, the overall valuation suggests that LendingTree may not sustain its current price levels given its financial metrics.