Is Kornit Digital Ltd. overvalued or undervalued?

As of 10 August 2022, the valuation grade for Kornit Digital Ltd. moved from expensive to risky, indicating a significant shift in its perceived value. The company is currently overvalued, as evidenced by its Price to Book Value of 1.42, an EV to Capital Employed ratio of 2.11, and an EV to Sales ratio of 2.77, all suggesting that the stock is priced higher than its fundamental value. In comparison, Energy Recovery, Inc. has a fair valuation with a P/E ratio of 31.92 and an EV to EBITDA of 25.76, highlighting the disparity in valuation within the industry.
Kornit Digital's recent stock performance has been poor, with a year-to-date return of -52.08%, significantly underperforming the S&P 500's gain of 12.22% over the same period. This trend continues over longer time frames, with a 5-year return of -74.41% compared to the S&P 500's 96.61%, further reinforcing the notion that the stock is overvalued relative to its peers and market performance.