Is Summit Midstream Corp. overvalued or undervalued?

As of 12 November 2024, the valuation grade for Summit Midstream Corp. has moved from fair to risky, indicating a potential concern regarding its valuation. The company appears to be overvalued, particularly when considering its P/E ratio of -2.87 and an EV to EBITDA ratio of 8.53, which suggests that it may not be generating sufficient earnings relative to its enterprise value. Additionally, the absence of a PEG ratio and a dividend yield further supports the notion of overvaluation.
In comparison to peers, Summit Midstream Corp. has a significantly lower P/E ratio than the industry average, which raises red flags about its profitability relative to its market price. For instance, while the company struggles with a negative P/E, other peers in the oil industry may be performing better, indicating that investors might be overestimating Summit's growth potential. Over the past year, Summit's stock has declined by 37.14%, while the S&P 500 has gained 17.14%, reinforcing the view that the stock is underperforming in the broader market context.