Is Reading International, Inc. overvalued or undervalued?

As of 10 May 2022, the valuation grade for Reading International, Inc. has moved from very attractive to risky, indicating a significant deterioration in its financial outlook. The company is currently deemed overvalued given its negative price-to-book value of -7.86 and an EV to EBITDA ratio of 15.41, which is higher than peers like Accel Entertainment, Inc. with a P/E of 22.72 and an EV to EBITDA of 7.88, and Marcus Corp. with a P/E of 56.70 and an EV to EBITDA of 5.86.
The company's financial metrics reflect ongoing challenges, including a return on capital employed (ROCE) of -6.85% and a negative return on equity (ROE). In comparison to the broader market, Reading International has underperformed significantly over longer periods, with a three-year return of -60.12% compared to the S&P 500's 58.74%. This underperformance, combined with the current valuation metrics, suggests that Reading International, Inc. is overvalued in the current market environment.