Is Seagate Technology Holdings Plc overvalued or undervalued?

As of 26 October 2022, the valuation grade for Seagate Technology Holdings Plc moved from fair to risky, indicating a potential concern regarding its valuation. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 18, which is significantly higher than its peers, such as Western Digital Corp. at 11.75 and NetApp, Inc. at 20.27. Additionally, the EV to EBITDA ratio stands at 16.48, while Western Digital's is much lower at 10.54, further highlighting the disparity in valuation.
The Price to Book Value ratio is notably negative at -32.50, suggesting that the company's market value is not supported by its book value, which is a concerning sign for investors. Despite a high ROCE of 46.99%, the negative book value indicates underlying issues. In terms of recent performance, Seagate has outperformed the S&P 500 with a year-to-date return of 151.00% compared to the index's 12.22%, but this strong performance does not necessarily justify its current valuation levels.