Is QuidelOrtho Corp. overvalued or undervalued?

As of 13 February 2024, the valuation grade for QuidelOrtho Corp. has moved from attractive to risky, indicating a significant shift in the company's financial outlook. The company is currently considered overvalued, especially given its negative P/E ratio and low ROE of -2.58%. Key ratios reveal a Price to Book Value of 0.67, an EV to EBITDA of 8.23, and an EV to Sales of 1.59, which further highlight the company's struggles in generating profits.
In comparison to its peers, QuidelOrtho Corp. has a less favorable EV to EBITDA ratio of 8.04 when compared to Bausch + Lomb Corp., which stands at 14.81. This disparity, along with QuidelOrtho's negative P/E ratio of -24.49, suggests that investors may be pricing in significant risks associated with the company's future performance. Additionally, the company's recent stock performance has lagged behind the S&P 500, with a year-to-date decline of 37.93% compared to a modest gain of 2.44% for the index, reinforcing the notion of an overvalued position.