Is Stratus Properties, Inc. overvalued or undervalued?

As of 14 August 2023, the valuation grade for Stratus Properties, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued given its current metrics, particularly with a Price to Book Value of 0.92 and an EV to Sales ratio of 4.98, which suggests that the market may be pricing the stock too high relative to its underlying assets and sales performance. Additionally, the negative EV to EBITDA of -28.53 further reinforces concerns about profitability.
In comparison to its peers, Stratus Properties, Inc. has a significantly lower EV to EBITDA ratio than FRP Holdings, Inc. at 16.37, which is classified as fair. Other risky peers like Tejon Ranch Co. show an even more alarming EV to EBITDA of -169.64. The stock's recent performance has been mixed; while it outperformed the S&P 500 over the past week and month, it has significantly underperformed over the longer term, with a one-year return of -20.17% compared to the S&P 500's 17.14%. This suggests that while there may be short-term gains, the long-term outlook remains concerning, reinforcing the view that Stratus Properties is currently overvalued.