Is Neogen Corp. overvalued or undervalued?

As of 30 July 2024, the valuation grade for Neogen Corp. has moved from expensive to risky, indicating a significant shift in its perceived value. Based on the current metrics, Neogen Corp. appears to be overvalued. The P/E ratio stands at an exceptionally high 281, while the Price to Book Value is only 0.42, suggesting that the market price is not justified by the company's book value. Additionally, the EV to EBITDA ratio is 10.94, which further highlights the disparity between the company's valuation and its earnings potential.
In comparison to its peers, Neogen Corp. has a P/E ratio that is significantly higher than Masimo Corp. at 179.74 and Globus Medical, Inc. at 18.37, both of which are in a better valuation position. Furthermore, the company's return performance has been notably poor, with a YTD return of -53.29% compared to the S&P 500's 12.22%, and a staggering 10Y return of -84.97% against the S&P 500's 231.64%. This stark contrast reinforces the notion that Neogen Corp. is not only overvalued but also struggling significantly in the market.