Is Lumentum Holdings, Inc. overvalued or undervalued?

As of 9 May 2023, the valuation grade for Lumentum Holdings, Inc. has moved from very expensive to risky. The company is currently considered overvalued given its financial metrics and peer comparisons. Key ratios include a Price to Book Value of 6.43, an EV to EBIT of -26.73, and an EV to EBITDA of -566.97, all indicating significant financial distress.
In comparison to its peers, Lumentum's P/E ratio is notably negative at -15.94, while Encore Wire Corp. boasts a P/E of 14.48 and Belden, Inc. has a P/E of 21.27, both suggesting a healthier financial position. Additionally, Lumentum's ROE stands at -42.74%, further emphasizing its struggles relative to its peers. Despite a strong recent performance against the S&P 500, with a 1-year return of 83.23% compared to the index's 10.26%, the underlying financial ratios indicate that the stock is overvalued.