Is Mesa Air Group, Inc. overvalued or undervalued?

As of 9 February 2022, the valuation grade for Mesa Air Group, Inc. has moved from attractive to risky, indicating a significant deterioration in its financial outlook. The company is currently assessed as overvalued given its negative price-to-book value of -0.66 and a high EV to EBITDA ratio of 3.39, which suggests that investors are paying a premium relative to its earnings potential. Additionally, the company's return on capital employed (ROCE) stands at 27.17%, but this is overshadowed by the negative return on equity (ROE) due to its loss-making status.
In comparison to its peers, Mesa Air Group's valuation appears unfavorable; for instance, Air Transport Services Group, Inc. has a P/E ratio of 54.21, indicating a very expensive valuation, while Hawaiian Holdings, Inc. also reflects a risky status with a P/E of -2.89. The overall market sentiment is reflected in the company's stock performance, which has significantly underperformed against the S&P 500, with a year-to-date decline of 20.53% compared to a 2.44% gain in the index. This combination of factors leads to the conclusion that Mesa Air Group, Inc. is overvalued in its current state.