Is Aviat Networks, Inc. overvalued or undervalued?

As of 5 November 2024, Aviat Networks, Inc. has moved from a fair to a risky valuation grade, indicating a significant deterioration in its financial outlook. The company is currently considered overvalued, particularly given its negative P/E ratio of -166.73 and a high EV to EBITDA ratio of 17.28, which suggests that investors are paying a premium for earnings that are not currently being generated. Additionally, the company's ROCE stands at a mere 3.72%, while its ROE is negative at -0.68%, further highlighting its financial struggles.
In comparison to its peers, Aviat Networks is underperforming significantly. For instance, CommScope Holding Co., Inc. has a more favorable EV to EBITDA ratio of 8.47, while Digi International, Inc. boasts a P/E ratio of 34.21, indicating a more attractive valuation relative to its earnings. Despite a recent positive stock return of 26.28% year-to-date, which outperformed the S&P 500's 2.44%, the overall financial metrics suggest that Aviat Networks remains a risky investment with limited upside potential.