Is FlexShopper, Inc. overvalued or undervalued?

As of 10 February 2025, the valuation grade for FlexShopper, Inc. has moved from fair to risky, indicating a shift in its financial health and market perception. The company appears to be overvalued given its current metrics, particularly with a price-to-book value of 0.89 and an EV to EBITDA ratio of 0.41, which suggest that the market is pricing the company higher than its underlying value. The return on equity (ROE) is notably negative at -4.08%, further supporting the notion of overvaluation.
In comparison to its peers, FlexShopper's valuation stands out unfavorably; for instance, Finance of America Cos., Inc. has a P/E ratio of 168.54, reflecting a very attractive valuation, while Fast Acquisition Corp. II is also classified as risky with a P/E of -1.31. The stark contrast in these ratios highlights FlexShopper's precarious position within its industry. Additionally, the company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -27.49% compared to the index's 2.44%, reinforcing the conclusion that FlexShopper is overvalued in the current market environment.