Is Matthews International Corp. overvalued or undervalued?

As of 21 November 2024, the valuation grade for Matthews International Corp. has moved from fair to risky, indicating a concerning shift in its financial outlook. The company appears overvalued given its current valuation metrics, particularly with a Price to Book Value of 1.94 and an EV to EBITDA ratio of 12.26, which are significantly higher compared to its peers. Notably, Matthews has a negative ROE of -2.59%, which further underscores the challenges it faces in generating returns for shareholders.
In comparison to its peers, Myers Industries, Inc. has a P/E ratio of 19.46 and an EV to EBITDA of 9.07, while Omega Flex, Inc. shows a fair valuation with a P/E of 20.93 and an EV to EBITDA of 14.18. These comparisons highlight that Matthews International Corp. is not only underperforming but also carries a much higher valuation risk relative to its industry counterparts. Furthermore, while the company has shown positive returns over the past week and month, its year-to-date return of -6.47% starkly contrasts with the S&P 500's 12.22%, suggesting that investors may want to exercise caution.