Is Cognyte Software Ltd. overvalued or undervalued?

As of 5 April 2022, the valuation grade for Cognyte Software Ltd. moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued, particularly given its high Price to Book Value of 4.07 and an EV to EBITDA ratio of 81.20, which suggests a significant premium over its earnings potential. Additionally, with a negative ROCE of -5.49% and ROE of -3.56%, the company's returns on capital and equity are concerning.
In comparison to its peers, Cognyte's valuation metrics stand out negatively; for instance, Ribbon Communications, Inc. has a more favorable EV to EBITDA of 11.38, while Riskified Ltd. shows a less extreme EV to EBITDA of -14.89. The company's recent stock performance has been underwhelming, with a year-to-date return of -1.39% compared to the S&P 500's 12.22%, although it did outperform the index over the past year with a return of 26.93% versus 17.14%. Overall, these factors suggest that Cognyte Software Ltd. is overvalued in the current market context.