Is Butterfly Network, Inc. overvalued or undervalued?

As of 29 March 2021, the valuation grade for Butterfly Network, Inc. has moved from does not qualify to risky, indicating a significant change in its financial outlook. The company is currently considered overvalued, primarily due to its negative earnings and high valuation ratios. Notably, the price-to-book value stands at 2.56, while the EV to EBITDA ratio is -8.12, reflecting ongoing losses and a challenging financial position. Additionally, the return on capital employed (ROCE) is a concerning -76.86%, further emphasizing the company's struggles.
In comparison to its peers, Butterfly Network's valuation metrics are less favorable. For instance, Pulse Biosciences, Inc. has a more severe EV to EBITDA ratio of -14.73, while Axogen, Inc. shows a staggering EV to EBITDA of 62.07, highlighting the variability in this sector. The company's recent stock performance has been underwhelming, with a year-to-date return of -34.29%, contrasting sharply with the S&P 500's positive return of 2.44% during the same period. This combination of factors reinforces the conclusion that Butterfly Network, Inc. is overvalued in its current state.