Is Iovance Biotherapeutics, Inc. overvalued or undervalued?

As of 28 February 2024, the valuation grade for Iovance Biotherapeutics, Inc. has moved from does not qualify to risky, indicating a significant deterioration in its valuation outlook. The company appears to be overvalued given its financial metrics, particularly with a Price to Book Value of 0.89 and an EV to Sales ratio of 1.57, which suggest that the market is pricing the stock higher than its book value and sales generation capabilities would justify. Additionally, the ROCE stands at a concerning -95.61%, reflecting severe inefficiencies in capital utilization.
In comparison to its peers, Iovance's valuation metrics are notably unfavorable; for instance, Rhythm Pharmaceuticals, Inc. has a PE ratio of -36.41, while Merus NV shows a PE of -13.18, both indicating greater losses than Iovance. The company's stock has underperformed significantly against the S&P 500, with a year-to-date return of -70.27% compared to the index's positive 12.22%, reinforcing the notion that the stock is not only overvalued but also struggling in the current market environment.