Is Vestis Corp. overvalued or undervalued?

As of 6 May 2025, the valuation grade for Vestis Corp. has moved from expensive to risky, indicating a significant shift in perception. The company appears to be overvalued given its financial metrics, with a Price to Book Value of 0.95 and an EV to EBITDA ratio of 8.08. Notably, the Return on Capital Employed (ROCE) stands at a mere 5.15%, while the Return on Equity (ROE) is negative at -1.12%, further supporting the overvaluation assessment.
In comparison to peers, Vestis Corp. shows a stark contrast with a P/E ratio of NA due to its loss-making status, while a competitor in the same space has an EV to EBITDA of 7.81. This discrepancy highlights the potential overvaluation of Vestis Corp. Additionally, the company's stock has underperformed significantly against the S&P 500, with a year-to-date return of -61.88% compared to the S&P's 2.44%. Overall, the combination of weak financial ratios and poor stock performance suggests that Vestis Corp. is overvalued in the current market.