Is Arcus Biosciences, Inc. overvalued or undervalued?

As of 28 February 2023, the valuation grade for Arcus Biosciences, Inc. has moved from attractive to risky, indicating a significant shift in its financial outlook. The company is currently deemed overvalued given its negative earnings and troubling financial ratios. Key metrics include a price-to-book value of 1.99 and a staggering return on equity (ROE) of -73.63%. Additionally, the EV to EBITDA ratio stands at -0.28, reflecting the company's struggles in generating positive earnings.
In comparison to its peers, Arcus Biosciences shows a concerning performance, with Dynavax Technologies Corp. having a P/E ratio of 52.88 and an EV to EBITDA of -802.86, while AbCellera Biologics, Inc. reports a P/E of -5.55 and an EV to EBITDA of -1.35. These comparisons highlight the challenges faced by Arcus, which has seen a year-to-date stock return of -42.04%, significantly underperforming the S&P 500's 2.44% return. Overall, the company's financial metrics and peer comparisons suggest that it is overvalued in its current state.