Is Nu Skin Enterprises, Inc. overvalued or undervalued?

As of 8 May 2024, the valuation grade for Nu Skin Enterprises, Inc. has moved from very attractive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios highlight this concern: the P/E ratio stands at 4, which is substantially lower than the industry average, while the EV to EBITDA ratio is 6.39, suggesting a lack of growth potential relative to peers.
In comparison to its peer, Olaplex Holdings, Inc., which has a P/E ratio of 76.71 and an EV to EBITDA of 9.24, Nu Skin's metrics appear concerning. The company's return on equity (ROE) is 23.44%, which is strong, but the overall financial ratios indicate that investors may be overestimating future growth prospects. Additionally, the company's stock has underperformed significantly over the past year, down 38.42% compared to a 10.26% gain in the S&P 500, further reinforcing the notion that it is currently overvalued.