Is ContextLogic, Inc. overvalued or undervalued?

As of 7 August 2025, the valuation grade for ContextLogic, Inc. has moved from risky to does not qualify, indicating a significant deterioration in its financial standing. The company is considered overvalued given its current metrics, particularly with a Price to Book Value of 1.30 and an EV to EBITDA of 1.04. Additionally, the Return on Capital Employed (ROCE) stands at a high 42.31%, but this is overshadowed by a negative Return on Equity (ROE) of -13.79%, reflecting underlying profitability challenges.
In comparison to its peers, ContextLogic, Inc. shows a stark contrast with 1-800-FLOWERS.COM, Inc. having a P/E of -8.52 and Torrid Holdings, Inc. with a P/E of 52.14, indicating a wide variance in valuation among companies in the same sector. Furthermore, ContextLogic's stock has outperformed the S&P 500 over the past year with a return of 52.59% compared to the index's 17.14%, but this performance is not sufficient to justify its current valuation amidst the overall financial instability reflected in its ratios.