Is Houston American Energy Corp. overvalued or undervalued?

As of 15 November 2023, the valuation grade for Houston American Energy Corp. has moved from risky to does not qualify, indicating a significant deterioration in its investment appeal. The company appears to be overvalued, especially given its troubling financial ratios, including a Price to Book Value of 1.09 and a negative EV to EBIT of -0.74. Additionally, the Return on Capital Employed (ROCE) stands at a staggering -184.39%, and the Return on Equity (ROE) is also negative at -40.53%.
In comparison to its peers, Houston American Energy Corp. shows a stark contrast. For instance, SandRidge Energy, Inc. has a P/E ratio of 6.46 and an EV to EBITDA of 4.39, while PrimeEnergy Resources Corp. boasts a P/E of 6.97 and an EV to EBITDA of 2.45, both indicating a more favorable valuation. Despite a recent surge in stock price, with a 1-month return of 177.96% compared to the S&P 500's 3.83%, the underlying financial metrics suggest that the company's current valuation does not justify the price, reinforcing the conclusion that it is overvalued.