Is Cumberland Pharmaceuticals, Inc. overvalued or undervalued?

As of 2 August 2016, the valuation grade for Cumberland Pharmaceuticals, Inc. moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued given its current metrics, particularly with a Price to Book Value of 3.04 and an EV to EBITDA ratio of 34.34, which suggests a high valuation relative to earnings before interest, taxes, depreciation, and amortization. Additionally, the ROCE stands at -19.13%, reflecting significant inefficiencies in generating returns on capital employed.
In comparison to its peers, Cumberland's valuation ratios are concerning; for instance, Regulus Therapeutics, Inc. has a lower EV to EBITDA of -9.1364, indicating a more favorable valuation relative to earnings. Furthermore, while Cumberland has shown impressive returns over the past year at 164.80%, this is contrasted by a lackluster 5-year return of -0.60%, suggesting volatility and potential overvaluation in the long term. Overall, the combination of high valuation ratios and poor return metrics leads to the conclusion that Cumberland Pharmaceuticals, Inc. is overvalued.