Is AbCellera Biologics, Inc. overvalued or undervalued?

As of 4 May 2023, the valuation grade for AbCellera Biologics, Inc. has moved from fair to risky, indicating a significant shift in its financial outlook. The company is currently considered overvalued. Key ratios reveal a Price to Book Value of 0.71, an EV to EBIT of -0.32, and an EV to Sales of 4.44, which highlight the challenges the company is facing in generating positive earnings.
In comparison to peers, AbCellera's valuation metrics are concerning; for instance, Dynavax Technologies Corp. has a P/E of 52.88, while Zentalis Pharmaceuticals, Inc. shows a more favorable EV to EBITDA of 1.13. Additionally, AbCellera's return on capital employed (ROCE) stands at a troubling -81.17%, further emphasizing its financial difficulties. Despite a recent strong performance relative to the S&P 500, with a year-to-date return of 13.65% compared to the index's 2.44%, the underlying financial ratios suggest that the stock is not positioned for sustainable growth at its current price.