Is Sportsman's Warehouse Holdings, Inc. overvalued or undervalued?

As of 6 December 2023, the valuation grade for Sportsman's Warehouse Holdings, Inc. has moved from expensive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued based on its financial metrics, particularly given its negative P/E ratio and ROE of -15.69%. The Price to Book Value stands at 0.54, while the EV to EBITDA ratio is 13.80, suggesting that despite low asset valuation, the company is still trading at a premium relative to its earnings potential.
In comparison to peers, Sportsman's Warehouse Holdings, Inc. has a less favorable outlook than Build-A-Bear Workshop, Inc., which is rated very attractive with a P/E of 12.51 and an EV to EBITDA of 7.89. Other risky peers include EVgo, Inc. and The Aaron's Co., Inc., which also reflect the challenging environment for Sportsman's Warehouse. Notably, the stock has underperformed the S&P 500 over the long term, with a 5-year return of -75.60% compared to the S&P 500's 92.42%, reinforcing the notion that the company is currently overvalued.