Is Torrid Holdings, Inc. overvalued or undervalued?

As of 8 September 2021, the valuation grade for Torrid Holdings, Inc. moved from very expensive to risky, indicating a shift in perception regarding its financial health and market position. The company is currently considered overvalued. Key ratios include a P/E ratio of 51, an EV to EBITDA of 6.30, and a ROCE of 41.12%.
In comparison to peers, Torrid's P/E ratio significantly exceeds that of Revolve Group, Inc. at 28.10 and Liquidity Services, Inc. at 29.47, both of which are rated as attractive. Additionally, the negative book value reflected in Torrid's ROE further emphasizes the challenges it faces. Over the past year, Torrid has underperformed against the S&P 500, with a return of -27.32% compared to the index's 10.26%, reinforcing the notion that the stock is overvalued in the current market context.