Is Midland States Bancorp, Inc. overvalued or undervalued?

As of 23 January 2025, the valuation grade for Midland States Bancorp, Inc. has moved from fair to risky, indicating a significant deterioration in its financial outlook. The company appears to be overvalued, particularly given its troubling financial ratios, including a Price to Book Value of 0.49, an EV to EBIT of -22.98, and an EV to EBITDA of -28.63. These figures suggest that the company's financial performance is under severe strain, especially with a negative ROCE of -2.73% and ROE of -1.73%.
In comparison to its peers, Midland States Bancorp's valuation is starkly unfavorable. For instance, CrossFirst Bankshares, Inc. is rated attractive with a P/E ratio of 10.04, while Mercantile Bank Corp. holds a fair valuation with a P/E of 9.02. The stark contrast in these valuations highlights the challenges faced by Midland States Bancorp. Additionally, the company's stock has underperformed relative to the S&P 500, with a year-to-date return of -31.11% compared to the index's 2.44%. This further reinforces the notion that Midland States Bancorp is currently overvalued.