Is TH International Ltd. overvalued or undervalued?

As of 30 November 2022, the valuation grade for TH International Ltd. moved from does not qualify to risky, indicating a significant shift in perception regarding its financial health. The company appears to be overvalued given its current metrics, with a Price to Book Value of -0.79 and an EV to EBITDA of -13.49, both suggesting deep financial distress. Additionally, the ROCE stands at a concerning -66.31%, reflecting poor capital efficiency.
In comparison to its peers, TH International Ltd. has a P/E ratio of -2.0003, while BJ's Restaurants, Inc. is very expensive at a P/E of 44.6236, and Kura Sushi USA, Inc. is also risky with a P/E of -581.5848. These comparisons highlight that TH International Ltd. is not only struggling relative to its peers but also indicates a broader industry challenge. The company's stock has underperformed significantly, with a year-to-date return of -20.85%, contrasting sharply with the S&P 500's 2.44% return, reinforcing the view that the stock is overvalued in its current state.