Is AMMO, Inc. overvalued or undervalued?

As of 14 February 2023, AMMO, Inc. has moved from a fair to a risky valuation grade, indicating a significant downgrade in its perceived financial health. The company is currently considered overvalued, particularly given its negative earnings and key ratios. The price-to-book value stands at 0.52, while the EV to EBITDA ratio is at -3.87, reflecting substantial operational challenges. Additionally, the return on capital employed (ROCE) and return on equity (ROE) are both negative at -19.52% and -19.47%, respectively.
In comparison to its peers, AMMO, Inc. shows a stark contrast to companies like Triumph Group, Inc., which has a P/E ratio of 29.93 and an EV to EBITDA of 13.69, and Ducommun, Inc., with a fair valuation and an EV to EBITDA of 14.70. The significant disparity in these ratios highlights the challenges faced by AMMO, Inc. in the current market. Furthermore, the company's recent stock performance has lagged behind the S&P 500, with a one-year return of -28.19% compared to the index's 10.26%, reinforcing the notion that it is overvalued in its current state.