Is Quad/Graphics, Inc. overvalued or undervalued?

As of 2 May 2023, the valuation grade for Quad/Graphics, Inc. has moved from expensive to risky, indicating a shift in perception regarding its valuation. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 5, which is significantly lower than peers like Ennis, Inc. at 14.02 and ARC Document Solutions, Inc. at 20.08. Additionally, the EV to EBITDA ratio stands at 3.60, while its PEG ratio is an exceptionally low 0.05, suggesting that the stock may not be priced appropriately relative to its growth prospects.
In comparison to its peers, Quad/Graphics, Inc. shows a concerning valuation profile, with a higher EV to EBIT of 6.30 compared to the industry average. The company’s recent stock performance has been mixed, with a 1-year return of 53.08% outpacing the S&P 500's 17.14%, but a year-to-date decline of 3.59% contrasts sharply with the S&P 500's 12.22% gain. This divergence in performance highlights the potential risks associated with its current valuation.