Is ModivCare, Inc. overvalued or undervalued?

As of 25 February 2022, the valuation grade for ModivCare, Inc. has moved from expensive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued given its negative price-to-book value of -0.90 and a high EV to EBIT ratio of 115.84, which suggests that investors are paying a premium for its earnings potential that it is not currently delivering. Additionally, the EV to EBITDA ratio stands at 10.28, further supporting the notion of overvaluation.
In comparison to its peers, ModivCare's valuation metrics are concerning. For instance, Bristow Group, Inc. is rated attractive with a P/E ratio of 9.07 and an EV to EBITDA of 7.42, while Seacor Marine Holdings, Inc. is also rated risky with an EV to EBITDA of 16.81. These comparisons highlight that ModivCare's financial ratios are significantly less favorable. Furthermore, the company's stock has dramatically underperformed against the S&P 500 over the past year, with a return of -86.90% compared to the index's 10.26%, reinforcing the view that ModivCare is currently overvalued.