Is Walgreens Boots Alliance, Inc. overvalued or undervalued?

As of 28 March 2024, the valuation grade for Walgreens Boots Alliance, Inc. has moved from very attractive to risky, indicating a shift in investor sentiment. The company appears to be overvalued, particularly given its negative P/E ratio and low ROE of -9.46%. Key ratios include a Price to Book Value of 1.86, an EV to EBITDA of 7.86, and an EV to Sales of 0.15, which suggest that the company's valuation metrics are not favorable compared to its financial performance.
In comparison to its peers, Walgreens Boots Alliance has a significantly lower EV to EBITDA ratio of 6.8577, indicating it is trading at a discount relative to its industry. The stock's recent performance shows a 1-year return of 29.51%, outperforming the S&P 500's 17.14% return, but the longer-term perspective reveals a troubling 5-year decline of -69.09% compared to the S&P's 96.61% gain. This stark contrast in long-term performance reinforces the notion that Walgreens Boots Alliance is currently overvalued.