Is Farfetch Ltd. overvalued or undervalued?

As of 18 May 2023, the valuation grade for Farfetch Ltd. has moved from fair to risky, indicating a significant deterioration in its financial health. The company appears to be overvalued, given its troubling financial metrics. Notably, the P/E ratio stands at 0.00, while the EV to EBIT is at -0.70, and the EV to EBITDA is at -1.34, all of which suggest severe operational challenges.
In comparison to peers, Petco Health & Wellness Company, Inc. has a P/E ratio of -14.10 and an EV to EBITDA of 9.08, highlighting that even within a risky category, Farfetch's metrics are alarmingly worse. The company's ROCE and ROE are also concerning at -75.03% and -173.84%, respectively. Furthermore, Farfetch has not generated any returns over the past year, contrasting sharply with the S&P 500's 10.26% return, reinforcing the perception of overvaluation.