Is 374Water, Inc. overvalued or undervalued?

As of 14 August 2024, the valuation grade for 374Water, Inc. has moved from risky to does not qualify, indicating a significant deterioration in its investment appeal. The company is currently considered overvalued, particularly given its troubling financial metrics. The price-to-book value stands at 4.60, while the EV to EBITDA ratio is an alarming -3.64, reflecting negative earnings and operational challenges. Additionally, the return on capital employed (ROCE) is at -248.12%, which underscores the inefficiency in generating returns from its capital.
In comparison to its peers, 374Water, Inc. exhibits a less favorable position; for instance, Purecycle Technologies, Inc. has a P/E ratio of -13.14, and Enviri Corp. shows a P/E of -18.60, both indicating their own struggles but with more established valuations. The company's recent stock performance has been volatile, with a year-to-date decline of 42.87%, contrasting sharply with the S&P 500's modest gain of 2.44% in the same period. This underperformance, coupled with its financial ratios, reinforces the conclusion that 374Water, Inc. is currently overvalued.