Is Veradigm, Inc. overvalued or undervalued?

As of 4 May 2023, Veradigm, Inc. has moved from a fair to an expensive valuation grade. The company is currently overvalued, with a P/E ratio of 142, significantly higher than peers like SolarWinds Corp., which has a P/E of 25.03, and Cellebrite DI Ltd., which has a negative P/E of -19.73. Additionally, Veradigm's EV to EBITDA stands at 9.96, while SolarWinds shows a much lower ratio of 13.67, indicating that Veradigm's valuation metrics are not aligned with its industry peers.
The company's financial performance is concerning, with a return on capital employed (ROCE) of only 2.68% and a return on equity (ROE) of 0.99%. These figures suggest inefficiencies in generating returns relative to its capital and equity. Furthermore, Veradigm's stock has underperformed compared to the S&P 500, with a year-to-date return of -53.95% versus the S&P 500's 2.44%. Overall, the combination of high valuation ratios and poor performance metrics indicates that Veradigm, Inc. is overvalued in the current market.