Is Transocean Ltd. overvalued or undervalued?

As of 1 November 2021, the valuation grade for Transocean Ltd. has moved from attractive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued based on its financial metrics. Key ratios include a Price to Book Value of 0.25, an EV to EBITDA of 7.28, and a ROCE of 2.67%. In comparison, peers such as Valaris Ltd. and Helmerich & Payne, Inc. have fair valuations with P/E ratios of 10.54 and 7.89, respectively, highlighting Transocean's relative underperformance.
The company's financial struggles are evident, as it reported a negative ROE of -0.76% and a significant decline in stock performance, with a year-to-date return of -25.87%, contrasting sharply with the S&P 500's positive return of 2.44% over the same period. Given these factors, Transocean Ltd. appears to be overvalued in the current market environment.