Is Cospower Engine. overvalued or undervalued?

As of 3 June 2025, the valuation grade for Cospower Engineering Ltd. has moved from risky to does not qualify, indicating a significant deterioration in its investment appeal. The company is currently overvalued, as evidenced by its high PE ratio of 110.33, an EV to EBITDA ratio of 40.14, and an EV to Sales ratio of 5.82. These figures suggest that investors are paying a premium for the stock relative to its earnings and sales performance.
In comparison to its peers, Cospower's PE ratio significantly exceeds that of its closest competitor, which has a more reasonable valuation profile. The company's return on equity (ROE) stands at a mere 1.52%, further highlighting its inefficiency in generating profits from shareholders' equity. While the stock has shown impressive returns over the past year at 203.03%, this is not sufficient to justify its current valuation levels, especially when considering the broader market performance.