Is Cohu, Inc. overvalued or undervalued?

As of 2 May 2024, Cohu, Inc. has moved from a fair valuation to a risky grade, indicating a significant deterioration in its financial standing. The company is currently considered overvalued, particularly given its negative P/E ratio of -10.96 and an EV to EBITDA ratio of -31.98, which reflect ongoing losses and operational challenges. Additionally, the Price to Book Value stands at 1.03, suggesting that the market is valuing the company at a premium compared to its book value, despite the negative returns on capital and equity, with ROCE at -11.73% and ROE at -9.33%. In comparison to its peers, such as MaxLinear, Inc., which has a P/E ratio of -6.03 and an EV to EBITDA of -9.91, Cohu, Inc. is significantly lagging. The disparity in valuation metrics highlights the market's skepticism regarding Cohu's future profitability and growth prospects. Furthermore, the company's recent stock performance has been poor, with a year-to-date decline of 30.82%, contrasting sharply with the S&P 500's modest gain of 2.44% during the same period, reinforcing the notion that Cohu, Inc. is overvalued in its current state.