Is Seven Hills Realty Trust overvalued or undervalued?

As of 17 February 2022, the valuation grade for Seven Hills Realty Trust moved from expensive to very attractive, indicating a significant improvement in its valuation outlook. The company appears undervalued, supported by a P/E ratio of 10, a Price to Book Value of 0.66, and an EV to EBITDA of 2.60. In comparison, its peers such as Chicago Atlantic Real Estate Finance, Inc. have a P/E of 7.89 and an EV to EBITDA of 5.69, while Transcontinental Realty Investors, Inc. shows a much higher P/E of 61.06, suggesting that Seven Hills Realty Trust is positioned favorably within its industry.
Despite a challenging year-to-date return of -15.75% compared to the S&P 500's 12.22%, the stock has shown resilience over longer periods, with a 3-year return of 5.56% versus the S&P 500's 70.41%. This performance, coupled with its attractive valuation ratios, reinforces the notion that Seven Hills Realty Trust is currently undervalued in the market.