Is Key Tronic Corp. overvalued or undervalued?

As of 13 August 2024, the valuation grade for Key Tronic Corp. has moved from expensive to risky, indicating a shift in perception regarding its financial health and market position. The company appears to be overvalued given its current financial metrics, particularly with a Price to Book Value of 0.26 and an EV to Sales ratio of 0.30, which suggest that the stock may not be reflecting its underlying value accurately. Additionally, the EV to EBITDA ratio stands at 9.77, which is relatively high compared to its peers.
In comparison to its peers, Key Tronic Corp. has a significantly negative P/E ratio of -4.15, while Xerox Holdings Corp. has a more favorable EV to EBITDA of 8.80, indicating better valuation metrics in the industry. Other risky peers like Backblaze, Inc. and Lantronix, Inc. also exhibit negative P/E ratios, but they do not present a compelling investment case either. Furthermore, Key Tronic's stock has underperformed relative to the S&P 500, with a year-to-date return of -13.91% compared to the index's 12.22%, reinforcing the notion that the stock may be overvalued at its current price.