Is RH overvalued or undervalued?

As of 7 September 2023, the valuation grade for RH has moved from expensive to risky, indicating a shift in perception regarding its market position. The company is currently considered overvalued. Key ratios include a P/E ratio of 29, an EV to EBITDA of 12.32, and a negative Price to Book Value of -21.00, which raises concerns about its financial health and valuation metrics.
In comparison to peers, RH's P/E ratio of 28.41 is higher than the industry average, while its EV to EBITDA ratio is similar to that of its peer. Notably, the company has underperformed against the S&P 500, with a year-to-date return of -52.69% compared to the index's 2.44%. This performance, combined with the current valuation metrics, reinforces the conclusion that RH is overvalued in the current market environment.