Is Net Lease Office Properties overvalued or undervalued?

As of 6 March 2024, the valuation grade for Net Lease Office Properties has moved from does not qualify to risky, indicating a shift in the perceived stability of the investment. The company appears to be overvalued, particularly when considering its P/E ratio of 40, which is significantly higher than the industry average, and an EV to EBITDA ratio of 5.21, suggesting a premium valuation compared to its earnings potential. Additionally, the Price to Book Value stands at 0.80, which, while below 1, does not compensate for the high P/E ratio.
In comparison to its peers, Net Lease Office Properties has a notably high P/E ratio, while its EV to EBITDA of 5.48 for a peer indicates a more favorable valuation in the sector. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -6.25% compared to the index's 12.22%, reinforcing the notion that the stock may be overvalued relative to broader market performance.