Is Highway Holdings Ltd. overvalued or undervalued?

As of 10 May 2023, the valuation grade for Highway Holdings Ltd. has moved from very attractive to risky, indicating a significant shift in the company's perceived value. The company is currently considered overvalued. Key ratios reveal a P/E ratio of 8, a Price to Book Value of 1.19, and an alarming ROCE of -31.95%, which raises concerns about its operational efficiency and profitability.
In comparison with peers, Highway Holdings Ltd. has a lower P/E ratio than TriMas Corp., which stands at 40.97, and Daktronics, Inc. at 23.31, both of which are performing better in terms of valuation. The company's PEG ratio of 0.07 further highlights its undervaluation relative to growth expectations, although the negative EV to EBIT and EV to EBITDA ratios of -3.10 suggest that the company is struggling financially. Additionally, Highway Holdings Ltd. has underperformed compared to the S&P 500 over various time frames, including a year-to-date decline of 11.79% against a 2.44% gain for the index, reinforcing the notion of its overvaluation.