Is Telephone & Data Systems, Inc. overvalued or undervalued?

As of 4 August 2023, the valuation grade for Telephone & Data Systems, Inc. has moved from very attractive to risky, indicating a shift in perception regarding its investment potential. The company is currently considered overvalued, with a P/E ratio of 52, which is higher than its peer United States Cellular Corp. at 51.12 and significantly higher than Globalstar, Inc. which has a negative P/E. Additionally, the EV to EBITDA ratio stands at 7.72, while the industry average appears to be higher, suggesting that the company may not be generating sufficient earnings relative to its valuation.
In terms of financial health, Telephone & Data Systems has a Price to Book Value of 0.87 and a ROE of 1.67%, both of which are relatively low compared to industry standards. The company's dividend yield of 0.38% also reflects a lack of strong returns for investors. Notably, the company's stock has outperformed the S&P 500 over the past year with a return of 80.30%, but this may not be sustainable given the current valuation metrics. Overall, the combination of high valuation ratios and low profitability indicators suggests that the company is overvalued in the current market.