Is Key Tronic Corp. overvalued or undervalued?

As of 13 August 2024, the valuation grade for Key Tronic Corp. has moved from fair to risky, indicating a significant deterioration in its financial outlook. The company is currently assessed as overvalued, particularly given its P/E ratio is not applicable due to losses, while its Price to Book Value stands at a low 0.26. Additionally, the EV to EBITDA ratio is relatively high at 9.77, and the ROE is negative at -5.33%, suggesting inefficiencies in generating returns on equity.
In comparison to peers, Key Tronic Corp. shows a less favorable position; for instance, Stratasys Ltd. has a P/E of -7.97 and an EV to EBITDA of -19.30, while Immersion Corp., which is rated attractive, has a P/E of 3.08 and an EV to EBITDA of 2.57. The company's recent stock performance has also lagged significantly behind the S&P 500, with a year-to-date return of -31.65% compared to the S&P 500's 2.44%. This combination of poor financial ratios and underperformance against its peers reinforces the conclusion that Key Tronic Corp. is currently overvalued.