Is Arcellx, Inc. overvalued or undervalued?

As of 8 May 2023, the valuation grade for Arcellx, Inc. has moved from does not qualify to risky, indicating a shift in the perceived risk associated with the company's financials. The company is currently considered overvalued given its high Price to Book Value of 9.00 and negative EV to EBIT and EV to EBITDA ratios of -16.87 and -17.41, respectively. Additionally, the Return on Equity (ROE) stands at a concerning -38.96%, reflecting significant losses.
In comparison to its peers, Arcellx's P/E ratio is not applicable due to its loss-making status, while Alvotech has a P/E of 28.82, and Arrowhead Pharmaceuticals shows a P/E of -13.84. This stark contrast highlights that Arcellx is trading at a premium despite its negative financial metrics. Recent stock performance shows that Arcellx has underperformed the S&P 500 year-to-date, with a decline of 17.04% compared to the index's gain of 2.44%, reinforcing the notion that the stock is overvalued in its current state.