Is Masco Corp. overvalued or undervalued?

As of 28 April 2021, the valuation grade for Masco Corp. has moved from fair to risky, indicating a more cautious outlook on the company's financial health. The company appears to be overvalued given its current P/E ratio of 16, which is lower than the peer average of approximately 21.12 for Otis Worldwide Corp. and significantly lower than the 33.32 for Carlisle Cos., Inc. Additionally, the EV to EBITDA ratio stands at 10.84, which is also below the industry average, reinforcing concerns about its valuation.
Masco Corp.'s price to book value is notably negative at -52.48, suggesting significant underlying issues with asset valuation. The company's return on capital employed (ROCE) is high at 54.43%, but this is overshadowed by the negative book value and the overall risky classification. In terms of stock performance, Masco Corp. has underperformed against the S&P 500, with a 1-year return of -10.65% compared to the index's 17.14%, and a 5-year return of 26.52% versus 96.61% for the S&P 500, further highlighting its valuation challenges.