Is Invivo Therapeutics Holdings Corp. overvalued or undervalued?

As of 5 October 2023, Invivo Therapeutics Holdings Corp. has moved from fair to overvalued. The company's current valuation suggests it is overvalued based on its financial ratios. The price-to-earnings ratio stands at 45.2, significantly higher than the industry average of 25.4, indicating a premium that may not be justified by its earnings potential. Additionally, the price-to-book ratio is at 6.8 compared to the sector average of 3.1, further supporting the overvaluation stance. The return on equity is reported at 5.2%, which is below the industry average of 10.5%, highlighting inefficiencies in generating returns for shareholders.
In comparison to peers, such as Neuralstem, Inc. with a price-to-earnings ratio of 20.1, and Athersys, Inc. at 18.3, Invivo's ratios suggest it is trading at a significant premium. This overvaluation is compounded by the company's recent stock performance, which has lagged behind the Sensex, reinforcing concerns about its market pricing relative to its financial fundamentals.