Is AgEagle Aerial Systems, Inc. overvalued or undervalued?

As of 13 November 2020, AgEagle Aerial Systems, Inc. has moved from a "does not qualify" to a "risky" valuation grade. The company is currently overvalued, given its significant financial challenges reflected in key ratios. The price-to-book value stands at 4.13, while the EV to EBITDA ratio is -2.04, indicating negative earnings performance. Additionally, the return on capital employed (ROCE) is a staggering -362.89%, and the return on equity (ROE) is -670.94%, underscoring the company's struggles.
In comparison with peers, AgEagle's valuation appears particularly unfavorable. For instance, Redwire Corp. has a P/E ratio of -13.31 and an EV to EBITDA of -56.61, while Byrna Technologies, Inc. is considered fair with a P/E of 47.65 and an EV to EBITDA of 62.87. The stark contrast in performance and valuation metrics suggests that AgEagle is not only underperforming its peers but also carries a higher risk profile. The company's stock has declined significantly, with a year-to-date return of -67.72%, compared to a modest 2.44% gain in the S&P 500, further reinforcing the overvaluation narrative.