Is W&T Offshore, Inc. overvalued or undervalued?

As of 10 May 2024, W&T Offshore, Inc. has moved from a valuation grade of very expensive to risky, indicating a significant shift in its financial outlook. The company is currently considered undervalued, primarily due to its negative financial metrics, including a Price to Book Value of -3.05 and an EV to EBIT ratio of -9.86. Additionally, the Return on Capital Employed (ROCE) stands at a concerning -31.24%, reflecting ongoing operational challenges.
In comparison to its peers, W&T Offshore's EV to EBITDA ratio of 4.00 is notably lower than SilverBow Resources, Inc. at 3.93 and significantly higher than Vitesse Energy, Inc., which boasts a very attractive EV to EBITDA of 7.49. Despite the negative performance over the past year, where the stock has returned -3.30% compared to the S&P 500's 10.26%, the recent uptick in monthly returns of 47.48% suggests potential recovery, reinforcing the view that the stock may be undervalued in the current market context.