Is Johnson Pharma overvalued or undervalued?

As of 27 May 2024, Johnson Pharma's valuation grade has moved from very expensive to risky, indicating a significant shift in its market perception. The company is currently assessed as overvalued, with a PE ratio of -48.95, an EV to EBIT of -50.90, and an EV to Capital Employed of 0.87. These ratios suggest that the company's earnings and operational efficiency are under considerable strain, leading to negative valuations.
In comparison to its peers, Johnson Pharma's valuation metrics are starkly unfavorable. For instance, MMTC, categorized as risky, has a PE ratio of 119.39, while Optiemus Infra, deemed fair, boasts a PE of 82.35. The stark contrast in these ratios highlights Johnson Pharma's challenging position within the diversified commercial services sector. Furthermore, the company's recent stock performance shows a year-to-date decline of 21.05%, in contrast to the Sensex's 5.58% gain, reinforcing the notion that Johnson Pharma is struggling relative to broader market trends.