Is Clover Health Investments Corp. overvalued or undervalued?

As of 17 May 2021, Clover Health Investments Corp. has moved from a grade of "does not qualify" to "risky," indicating a significant downgrade in its valuation outlook. The company is currently assessed as overvalued, primarily due to its high Price to Book Value of 4.80 and an extraordinarily high EV to EBITDA ratio of 981.70, which suggests that investors are paying a premium for the company's earnings potential that is not being realized. Additionally, the company has a negative Return on Equity (ROE) of -7.27%, further highlighting its financial struggles.
In comparison to peers, Clover Health's valuation metrics are concerning; for instance, Abacus Life, Inc. has a more favorable EV to EBITDA of 33.24, despite also being classified as risky. The stark difference in these ratios illustrates that Clover Health is not only underperforming relative to its industry but is also priced at a level that does not reflect its current financial health. Recent stock performance shows that Clover has underperformed against the S&P 500, particularly over the past month with a decline of 11.29%, reinforcing the notion that the stock is overvalued at its current price of 2.83.