Is The Children's Place, Inc. overvalued or undervalued?

As of 16 March 2023, The Children's Place, Inc. has moved from a fair to a risky valuation grade, indicating a significant deterioration in its financial outlook. The company is currently overvalued, especially given its negative price-to-earnings ratio and a price-to-book value of -2.55. Key ratios such as the EV to EBITDA at 10.98 and ROCE at 4.19% further highlight the challenges the company faces in generating returns.
In comparison to its peers, The Children's Place, Inc. shows concerning metrics, with Winmark Corp. having a P/E of 38.17 and Shoe Carnival, Inc. at 12.12, both of which are significantly more favorable. The company's recent stock performance has been poor, with a year-to-date decline of 64.24%, contrasting sharply with the S&P 500's gain of 2.44% over the same period. This underperformance reinforces the view that the company is not only overvalued but also struggling to compete effectively in its industry.