Is Eton Pharmaceuticals, Inc. overvalued or undervalued?

As of 8 August 2024, the valuation grade for Eton Pharmaceuticals, Inc. has moved from fair to risky, indicating a deteriorating outlook. The company appears to be overvalued, particularly given its negative P/E ratio and poor return metrics. Key ratios include a Price to Book Value of 18.47, an EV to EBITDA of 464.26, and a ROE of -16.07%.
In comparison to its peers, Eton's valuation metrics are significantly worse; for instance, Esperion Therapeutics, Inc. has a P/E of -4.99 and an EV to EBITDA of -28.92, while Protalix Biotherapeutics, Inc. shows a more attractive P/E of 20.08 and an EV to EBITDA of 9.80. Despite Eton's impressive stock performance, with a 1Y return of 212.35% compared to the S&P 500's 17.14%, the underlying financial metrics suggest that the stock is not supported by its fundamentals.