Is NetSTREIT Corp. overvalued or undervalued?

As of 4 November 2024, the valuation grade for NetSTREIT Corp. has moved from fair to risky, indicating a shift in perception regarding its investment potential. The company is currently considered overvalued, with a P/E ratio of 71, significantly higher than the industry average, which is not explicitly provided but can be inferred from peer comparisons. Additionally, the EV to EBITDA ratio stands at 9.81, while the ROE is a mere 1.43%, suggesting inefficiencies in generating returns relative to its equity.
In comparison to its peers, NetSTREIT Corp. has a higher P/E ratio than The GEO Group, Inc. at 31.10 and Alexander & Baldwin, Inc. at 20.01, both of which are considered fairly valued. The company’s dividend yield of 422.95% appears attractive but is misleading given its low ROCE of 4.12%. Recent performance shows that NetSTREIT has outperformed the S&P 500 over the past month with a return of 8.31% compared to 3.83%, yet the overall valuation metrics suggest caution for potential investors.