Is Owens & Minor, Inc. overvalued or undervalued?

As of 5 May 2023, the valuation grade for Owens & Minor, Inc. has moved from fair to risky, indicating a significant shift in its perceived value. The company appears to be overvalued at this time, with a P/E ratio of 6, which is considerably lower than the industry average, suggesting that the market may not be pricing in the risks adequately. Additionally, the EV to EBITDA ratio stands at 4.76, and the PEG ratio is notably low at 0.14, further supporting the notion of overvaluation.
In comparison to its peers, Owens & Minor, Inc. has a P/E ratio of 5.21, which is higher than AtriCure, Inc. at -61.65 and Tandem Diabetes Care, Inc. at -12.30, both of which are also classified as risky. The company’s ROE of 19.43% and ROCE of 11.14% indicate some level of operational efficiency, but these figures do not compensate for the overall market sentiment reflected in its stock performance. The recent returns show a stark underperformance against the S&P 500, particularly over the past year, where Owens & Minor has declined by 57.10% compared to the index's 10.26% gain, reinforcing the valuation concerns.