Is Redfin Corp. overvalued or undervalued?

As of 5 August 2021, the valuation grade for Redfin Corp. has moved from expensive to risky, indicating a shift in perception regarding its financial health and market position. The company is currently considered overvalued given its negative P/E ratio and other concerning financial metrics. Key ratios include a Price to Book Value of -8.07, an EV to EBIT of -7.49, and an EV to EBITDA of -10.00, all of which highlight significant financial distress.
In comparison to its peers, Redfin Corp. shows a less favorable outlook; for instance, Marcus & Millichap, Inc. has a P/E of -173.35, while Forestar Group, Inc. is in a more attractive position with a P/E of 5.68. The negative return on capital employed and negative book value further reinforce the notion that Redfin is overvalued. Despite a strong recent performance against the S&P 500, with a year-to-date return of 46.63% compared to the S&P 500's 2.44%, the underlying financial metrics suggest caution for potential investors.