Is LivaNova Plc overvalued or undervalued?

As of 7 May 2025, LivaNova Plc's valuation grade has moved from attractive to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued, particularly given its negative P/E ratio and poor returns on capital, with a Price to Book Value of 2.45 and an EV to Sales ratio of 1.90. In comparison, peers such as Globus Medical, Inc. have a much more favorable P/E ratio of 18.37, while Sanmina Corp. boasts a significantly higher P/E of 39.80, highlighting LivaNova's relative weakness in valuation metrics.
Additionally, LivaNova's recent stock performance has lagged behind the S&P 500, with a YTD return of 20.73% compared to the index's 12.22%, but over the longer term, its 5-year return of 25.05% still falls short of the S&P 500's 96.61%. This underperformance, combined with the company's negative financial ratios, reinforces the conclusion that LivaNova is overvalued in its current state.