Is Brilliant Earth Group, Inc. overvalued or undervalued?

As of 6 May 2025, the valuation grade for Brilliant Earth Group, Inc. has moved from expensive to risky, indicating a significant deterioration in its financial standing. The company is currently assessed as overvalued, primarily due to its negative earnings and poor return metrics. Key ratios include a price-to-book value of 9.41, an EV to EBITDA of 11.12, and a return on equity (ROE) of -2.28%.
In comparison to its peers, Brilliant Earth Group's P/E ratio is notably negative at -131.46, while The Honest Co., Inc. has a P/E of 40.86, and Barnes & Noble Education, Inc. stands at -72.35. This stark contrast highlights the challenges faced by Brilliant Earth Group in generating profits relative to its competitors. Additionally, the company's stock has underperformed significantly against the S&P 500, with a year-to-date return of -36.67% compared to the index's 2.44%.