Is Digital Brands Group, Inc. overvalued or undervalued?

As of 13 August 2021, the valuation grade for Digital Brands Group, Inc. has moved from does not qualify to risky, indicating a significant shift in its perceived financial health. The company is currently considered overvalued, primarily due to its troubling financial metrics. The P/E ratio is not applicable as the company is loss-making, while the Price to Book Value stands at 8.33, and the EV to Sales ratio is 5.69. Additionally, the ROCE and ROE are alarmingly low at -100.96% and -210.87%, respectively.
When compared to peers, Digital Brands Group, Inc. shows a concerning picture against companies like Rocky Brands, Inc., which has a P/E of 11.68 and an EV to EBITDA of 6.91, and Lakeland Industries, Inc., with a P/E of 136.41 and an EV to EBITDA of 28.71. The stark contrast in these ratios highlights the company's financial struggles. Furthermore, the stock has underperformed significantly against the S&P 500 over the past year, with a return of -85.51% compared to the index's 10.26%. This combination of factors reinforces the conclusion that Digital Brands Group, Inc. is overvalued in the current market.