Is Evolv Technologies Holdings, Inc. overvalued or undervalued?

As of 10 August 2022, the valuation grade for Evolv Technologies Holdings, Inc. moved from attractive to risky, indicating a significant shift in its financial outlook. The company is currently assessed as overvalued given its negative P/E ratio due to losses, a Price to Book Value of 7.48, and a troubling ROCE of -80.87%. Comparatively, its peer PAR Technology Corp. has a P/E of -34.42, while Transcat, Inc. is deemed very expensive with a P/E of 48.26, highlighting the disparity in valuation among industry peers.
Evolv's financial metrics, including an EV to EBITDA of -16.75 and an EV to Sales ratio of 7.65, further support the conclusion of overvaluation. Despite a strong performance against the S&P 500, with a year-to-date return of 53.42% compared to the index's 2.44%, the underlying financial ratios suggest that the stock may not sustain its current price levels given the ongoing losses and negative returns on equity.