Is Black Diamond Therapeutics, Inc. overvalued or undervalued?

As of 12 May 2025, the valuation grade for Black Diamond Therapeutics, Inc. has moved from does not qualify to expensive, indicating a significant shift in its perceived value. Based on the analysis, the company appears to be overvalued. The P/E ratio stands at 29, which is considerably higher than its peers, such as Stoke Therapeutics, Inc. with a P/E of 12.66, and Harpoon Therapeutics, Inc. which has a negative P/E of -28.51. Additionally, the EV to EBITDA ratio for Black Diamond is 0.54, while Stoke Therapeutics shows a higher ratio of 6.60, further highlighting the disparity in valuation.
The PEG ratio for Black Diamond is 0.27, suggesting that despite its high P/E, growth expectations may not justify the current price. The company's ROCE is notably high at 55.79%, but the ROE is relatively low at 3.60%, indicating potential inefficiencies in generating returns for shareholders. Furthermore, the recent stock performance shows a decline of 53.10% over the past year, contrasting sharply with the S&P 500's return of 10.26%, reinforcing the notion that the stock may be overvalued given its current market conditions.