Is Eagle Pharmaceuticals, Inc. overvalued or undervalued?

As of 8 August 2023, Eagle Pharmaceuticals, Inc. has moved from a risky to a fair valuation grade. The company is currently considered undervalued, with a P/E ratio of 2, significantly lower than its peers, such as Akebia Therapeutics, Inc. which has a P/E of -20.31, and Praxis Precision Medicines, Inc. with a P/E of -4.16. Additionally, Eagle's price-to-book value stands at 0.15, while its EV to EBITDA ratio is 1.47, indicating a favorable valuation relative to its earnings potential.
In comparison to its peers, Eagle Pharmaceuticals shows a more stable financial position, reflected in its ROCE of 13.77% and ROE of 7.35%. While the stock has experienced a significant decline over the past year, it has outperformed the S&P 500 in the short term, with a year-to-date return of 458% compared to the S&P 500's 2.44%. This performance, combined with its low valuation ratios, supports the conclusion that Eagle Pharmaceuticals is currently undervalued.