Is Bridgeline Digital, Inc. overvalued or undervalued?

As of 15 May 2023, the valuation grade for Bridgeline Digital, Inc. has moved from fair to risky, indicating a deterioration in its investment appeal. The company appears to be overvalued, given its negative financial metrics and poor performance relative to its peers. Key ratios include a Price to Book Value of 1.79, an EV to EBIT of -9.71, and an EV to Sales of 1.08, all of which suggest significant challenges in profitability and valuation.
In comparison to its peers, Bridgeline Digital's EV to EBITDA of -16.70 is notably worse than that of NetSol Technologies, Inc., which has a positive EV to EBITDA of 16.8927, highlighting the latter's stronger financial health. Additionally, Bridgeline's ROCE of -20.61% and ROE of -15.99% further emphasize its struggles. Over the past year, Bridgeline has returned 18.75%, slightly outperforming the S&P 500's 17.14%, but its longer-term performance shows significant underperformance, particularly over three and five years.