Is Educational Development Corp. overvalued or undervalued?

As of 10 October 2024, the valuation grade for Educational Development Corp. has moved from fair to risky, indicating a deterioration in its financial outlook. The company appears to be overvalued, given its significant negative returns and poor financial ratios. Key valuation metrics include a Price to Book Value of 0.42, an EV to EBIT of -7.10, and an EV to EBITDA of -9.52, all suggesting that the company is struggling to generate positive returns.
In comparison to peers, Educational Development Corp. has a negative P/E ratio of -2.6067, while Scholastic Corp. shows an extraordinarily high P/E ratio of 684.9918, and Value Line, Inc. stands out as attractive with a P/E of 18.5395. The company's stock has underperformed significantly against the S&P 500, with a 1Y return of -24.62% compared to the index's 17.14%, reinforcing the notion that it is currently overvalued.