Is SunLink Health Systems, Inc. overvalued or undervalued?

As of 28 September 2022, the valuation grade for SunLink Health Systems, Inc. moved from fair to risky, indicating a deterioration in its financial outlook. The company appears to be overvalued given its negative performance metrics, including a Price to Book Value of 0.46, an EV to EBIT of 0.28, and an EV to EBITDA of 0.50. In comparison to peers, Community Health Systems, Inc. has a P/E ratio of -2.9957 and an EV to EBITDA of 8.0222, while biote Corp. shows a P/E of 5.5497 and an EV to EBITDA of 6.2832, highlighting SunLink's relative weakness.
Despite the overvaluation, SunLink has shown strong short-term stock performance, with a year-to-date return of 26.7%, significantly outperforming the S&P 500's 12.22%. However, its long-term performance is concerning, with a 3-year return of -6.16% compared to the S&P 500's 70.41%, reinforcing the notion that the company may not be a sound investment at its current valuation.