Is RXO, Inc. overvalued or undervalued?

As of 2 May 2024, RXO, Inc. has moved from a valuation grade of very expensive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued based on its financial metrics. Key ratios include a Price to Book Value of 1.66, an EV to EBITDA of 25.17, and a ROE of -13.04%, which reflects a loss-making position.
In comparison to its peers, RXO, Inc. has a notably high EV to EBITDA ratio compared to ACI Worldwide, Inc., which stands at 13.43, and HashiCorp, Inc., which is at -27.71. This suggests that RXO, Inc. is not only underperforming but also priced higher relative to its earnings potential compared to more attractive peers. Additionally, the company's recent stock performance has been poor, with a year-to-date return of -33.68%, contrasting sharply with the S&P 500's gain of 2.44% during the same period, further reinforcing the notion that RXO, Inc. is overvalued.