Is Charles & Colvard Ltd. overvalued or undervalued?

As of 2 February 2023, the valuation grade for Charles & Colvard Ltd. has moved from attractive to risky, indicating a significant deterioration in its financial outlook. The company is currently overvalued, as evidenced by its negative P/E ratio and troubling financial metrics. The Price to Book Value stands at a mere 0.04, while the EV to EBIT and EV to EBITDA ratios are 0.39 and 0.41, respectively, reflecting poor operational performance.
In comparison to its peers, Charles & Colvard Ltd. shows stark contrasts; Movado Group, Inc. has a P/E ratio of 21.12 and an EV to EBITDA of 7.96, categorizing it as very attractive, while Fossil Group, Inc. is also deemed risky with an EV to EBITDA of 25.47. The company's ROE is alarmingly low at -50.25%, further underscoring its financial struggles. Recent stock performance has been dismal, with a year-to-date return of -72.93%, significantly underperforming the S&P 500's 2.44% return.