Is NexPoint Residential Trust, Inc. overvalued or undervalued?

As of 29 April 2025, the valuation grade for NexPoint Residential Trust, Inc. has moved from expensive to risky, indicating a shift towards a more cautious outlook. The company appears to be overvalued, particularly given its negative return on equity of -2.01% and a price-to-book value of 2.26. Additionally, the EV to EBITDA ratio stands at 6.36, which is relatively high compared to some peers, suggesting that the stock may not offer sufficient value at its current price.
In comparison to its peers, NexPoint Residential Trust, Inc. has a less favorable EV to EBITDA ratio than Global Net Lease, Inc. at 3.43 and Ellington Financial, Inc. at 2.92, both of which are considered very attractive. The company's recent stock performance has also been underwhelming, with a year-to-date return of -22.06% compared to the S&P 500's gain of 12.22%, reinforcing the notion that it may be overvalued in the current market environment.