Is Extreme Networks, Inc. overvalued or undervalued?

As of 1 May 2024, the valuation grade for Extreme Networks, Inc. has moved from fair to risky, indicating a deterioration in its investment appeal. The company appears to be overvalued, particularly given its high Price to Book Value of 32.41 and negative ROCE of -24.12%. Additionally, the EV to EBITDA ratio stands at 87.55, which suggests that the company is trading at a significant premium relative to its earnings before interest, taxes, depreciation, and amortization.
In comparison to its peers, Extreme Networks, Inc. has a notably worse P/E ratio of -414.39, while Stratasys Ltd. and ADTRAN Holdings, Inc. have P/E ratios of -8.38 and -12.33, respectively. Furthermore, the company has outperformed the S&P 500 over the past year with a return of 51.30% compared to the index's 17.14%, but this does not mitigate the concerns raised by its current valuation metrics.