Is Alector, Inc. overvalued or undervalued?

As of 8 November 2022, Alector, Inc. moved from fair to risky, indicating a deterioration in its valuation outlook. The company appears to be overvalued given its financial metrics, particularly with a Price to Book Value of 1.57 and an EV to EBIT of 1.30, which suggest that investors are paying a premium relative to the company's underlying assets and earnings potential. Additionally, the ROCE stands at a high 59.50%, but this is overshadowed by a troubling ROE of -128.14%, reflecting significant losses.
In comparison to its peers, Alector's valuation ratios are concerning; for instance, Avid Bioservices, Inc. has a P/E ratio of -5.2542 while Editas Medicine, Inc. shows a P/E of -1.5909, both indicating a similar risk profile. The overall peer comparison highlights that Alector is not only risky but also underperforming relative to its industry counterparts. Although return data is not available, the lack of positive returns compared to the S&P 500 reinforces the notion that Alector's current valuation may not be justified.