Is Lowe's Companies, Inc. overvalued or undervalued?

As of 18 August 2021, the valuation grade for Lowe's Companies, Inc. has moved from expensive to risky, indicating a shift in perception regarding its market position. The company is currently assessed as overvalued based on its financial metrics. The P/E ratio stands at 19, which is significantly lower than its peer The Home Depot, Inc. at 41.45, while Builders FirstSource, Inc. presents a more favorable P/E of 13.04, highlighting a disparity in valuation among competitors.
Additional ratios such as the EV to EBITDA of 13.04 and a negative Price to Book Value of -9.53 further underscore the concerns surrounding Lowe's valuation. Despite a strong ROCE of 54.43%, the overall financial picture suggests that Lowe's is not positioned favorably compared to its peers, particularly given its recent stock performance, which has lagged behind the S&P 500 over the past year.