Is Beneficient overvalued or undervalued?

As of 10 May 2024, the valuation grade for Beneficient has moved from does not qualify to risky, indicating a significant shift in its perceived investment quality. The company is currently deemed overvalued, with a P/E ratio of 0.0079, a price-to-book value of -0.02, and an EV to EBITDA ratio of 0.02, which starkly contrasts with its peers. For instance, New Mountain Finance Corp. and Capital Southwest Corp. have P/E ratios of 10.1005 and 17.1112, respectively, both categorized as very attractive, highlighting the disparity in valuation.
Beneficient's financial metrics suggest it is struggling, particularly with a negative book value and a return on capital employed (ROCE) of 128.38%, which may not be sustainable given the overall negative trends. The company's stock has underperformed significantly against the S&P 500, with a year-to-date return of -62.26% compared to the index's 2.44%. This performance, along with the valuation metrics, reinforces the conclusion that Beneficient is overvalued in its current state.