Is Frequency Therapeutics, Inc. overvalued or undervalued?

As of 18 March 2025, the valuation grade for Frequency Therapeutics, Inc. has moved from does not qualify to risky. This suggests a significant shift in the company's perceived financial health. The company is currently considered overvalued, particularly given its negative P/E ratio and troubling return metrics, including a ROCE of -362.89% and a ROE of -62.91%. The price to book value stands at 0.98, indicating that the market is not valuing the company's assets favorably.
In comparison to its peers, Frequency Therapeutics shows a stark contrast with Microbot Medical, Inc., which has a P/E ratio of -7.54 and an EV to EBITDA of -4.73, indicating a more severe valuation issue. Surrozen, Inc., also categorized as risky, has a P/E of 6.49, suggesting that it is being valued more positively despite its own challenges. The company's stock performance has been dismal, with a year-to-date return of -69.14% compared to a 2.44% gain in the S&P 500, reinforcing the view that Frequency Therapeutics is struggling significantly in the current market environment.