Is Mesa Air Group, Inc. overvalued or undervalued?

As of 9 February 2022, the valuation grade for Mesa Air Group, Inc. has moved from expensive to risky, indicating a more cautious outlook on the company's financial health. Based on the available metrics, Mesa Air Group appears to be overvalued, particularly given its negative Price to Book Value of -0.66 and a high EV to EBIT ratio of 34.91, suggesting that investors are paying a premium for earnings that are not currently being generated. Additionally, the EV to EBITDA ratio stands at 3.39, which, while lower than some peers, still reflects a challenging valuation environment.
In comparison to its peers, Mesa Air Group's EV to EBITDA of 4.2504 is notably higher than Air Transport Services Group, Inc. at 5.8310 and Hawaiian Holdings, Inc. at -9.2893, indicating a relative overvaluation within the industry. Furthermore, while Mesa's recent stock performance shows a 20.69% year-to-date return compared to the S&P 500's 12.22%, its long-term performance has been significantly lagging, with a 5-year return of -57.83% versus the S&P 500's 96.61%. This divergence reinforces the notion that Mesa Air Group may be overvalued in the current market landscape.