Is Alpha & Omega Semiconductor Ltd. overvalued or undervalued?

As of 6 November 2023, the valuation grade for Alpha & Omega Semiconductor Ltd. has moved from expensive to risky, indicating a shift in perception regarding its financial health and market position. The company appears to be overvalued, given its negative P/E ratio and low return metrics. Key ratios include a Price to Book Value of 0.94, an EV to EBITDA of 16.50, and an EV to Sales of 1.03, which suggest that the company is not generating sufficient returns relative to its valuation.
In comparison to peers, Alpha & Omega's EV to EBITDA ratio of 16.50 is notably higher than that of SiTime Corp. at -96.82 and Ambarella, Inc. at -46.97, both of which are also classified as risky. Furthermore, the company's recent stock performance shows a YTD return of -20.42%, significantly lagging behind the S&P 500's return of 12.22% during the same period, reinforcing the notion that the stock is currently overvalued.