Is Kobo Biotech overvalued or undervalued?

As of 25 April 2023, Kobo Biotech's valuation grade has moved from does not qualify to risky, indicating a significant deterioration in its financial standing. The company is currently assessed as overvalued, primarily due to its negative PE ratio of -1.30, an EV to EBITDA ratio of -145.92, and a ROCE of -74.85%. These ratios highlight severe profitability issues and suggest that the company is struggling to generate positive returns.
In comparison to its peers, Kobo Biotech's financial metrics starkly contrast with those of Godrej Industries, which has a PE ratio of 46.63 and an EV to EBITDA of 34.36, indicating a much healthier valuation. Other peers like Solar Industries are considered very expensive with a PE ratio of 123.77. Additionally, Kobo Biotech's recent stock performance has been poor, with a one-year return of -43.42%, significantly underperforming the Sensex's 7.61% return over the same period. This further reinforces the notion that the company is overvalued in its current state.