Is Alvotech overvalued or undervalued?

As of 16 November 2022, Alvotech's valuation grade moved from does not qualify to risky, indicating a shift in its perceived investment quality. The company appears to be overvalued, given its P/E ratio of 33, which is significantly higher than the industry average of approximately 28.82. Additionally, the EV to EBITDA ratio stands at 31.55, further suggesting that the stock may be trading at a premium compared to its earnings potential. The PEG ratio of 0.42, while indicating growth potential, does not sufficiently offset the concerns raised by other ratios.
In comparison to its peers, Alvotech's valuation metrics are concerning, especially when looking at Axsome Therapeutics, which has a P/E of -20.23, and Krystal Biotech, which is considered expensive with a P/E of 25.47. The negative book value for Alvotech also raises red flags regarding its financial health. Furthermore, the company's stock has underperformed against the S&P 500, with a year-to-date return of -30.99% compared to the index's 2.44%. Overall, these factors contribute to the conclusion that Alvotech is overvalued in the current market environment.