Is Alkami Technology, Inc. overvalued or undervalued?

As of 4 August 2021, Alkami Technology, Inc. has moved from a valuation grade of does not qualify to risky, indicating a significant downgrade in its valuation outlook. The company appears to be overvalued given its financial metrics, with a P/E ratio of NA due to losses, a Price to Book Value of 9.39, and an EV to Sales ratio of 9.67. In comparison, peers such as Clearwater Analytics Holdings, Inc. and AvidXchange Holdings, Inc. have P/E ratios of 12.55 and 559.38, respectively, highlighting a stark contrast in valuation.
The company’s financial performance is concerning, with a ROCE of -6.85% and a ROE of -9.86%, suggesting inefficiencies in generating returns on capital and equity. Additionally, the EV to EBITDA ratio of -107.02 further emphasizes the challenges faced by Alkami Technology. Despite a recent stock return of 13.12% over the past year, which outperformed the S&P 500's 10.26%, the overall valuation metrics indicate that Alkami Technology is overvalued in its current state.