Is Alto Ingredients, Inc. overvalued or undervalued?

As of 14 March 2023, the valuation grade for Alto Ingredients, Inc. has moved from attractive to risky, indicating a significant shift in its financial outlook. The company is currently deemed overvalued based on its financial ratios, including a Price to Book Value of 0.37 and an EV to Sales ratio of 0.18, which suggest that the market is not pricing in the company's potential effectively. Additionally, the ROCE stands at -12.63% and ROE at -18.96%, further highlighting the company's struggles to generate returns.
In comparison to its peers, Alto Ingredients' valuation metrics are concerning. For instance, Proto Labs, Inc. has a P/E ratio of 44.27, indicating a premium valuation, while Westlake Chemical Partners LP is considered very attractive with a P/E of 2.42. The stark contrast in these ratios underscores the challenges faced by Alto Ingredients in the current market environment. Furthermore, the company's stock has underperformed relative to the S&P 500, with a year-to-date return of -28.85% compared to the index's 2.44%, reinforcing the notion that the stock is overvalued at its current price of $1.11.