Is FTAC Emerald Acquisition Corp. overvalued or undervalued?

As of 15 May 2025, the valuation grade for FTAC Emerald Acquisition Corp. has moved from does not qualify to risky, indicating a deterioration in its investment profile. The company appears to be overvalued given its high Price to Book Value of 2.82 and negative EV to EBIT and EV to EBITDA ratios of -49.46 and -50.38, respectively. Additionally, the company's ROE stands at a concerning -29.59%, reflecting significant losses relative to shareholder equity.
In comparison with peers, Kensington Capital Acquisition Corp. shows a more favorable P/E ratio of 18.78, while FTAC's P/E is not applicable due to its loss-making status. The stark contrast in valuation metrics suggests that FTAC is not only struggling but also priced at a premium compared to its peers. Over the past year, FTAC has underperformed significantly, with a return of -68.43% compared to the S&P 500's gain of 17.14%, reinforcing the notion that the stock is overvalued.