Is Lulu's Fashion Lounge Holdings, Inc. overvalued or undervalued?

As of 9 May 2023, Lulu's Fashion Lounge Holdings, Inc. has moved from a fair to a risky valuation grade. The company is currently considered overvalued given its significant financial challenges, including a Price to Book Value of 2.75 and an alarming ROE of -445.27%. Additionally, the EV to EBIT and EV to EBITDA ratios are both negative at -1.00 and -1.27, respectively, indicating severe operational inefficiencies.
In comparison to its peers, Lulu's shows a stark contrast, particularly against Liquidity Services, Inc., which has a P/E of 29.47 and an EV to EBITDA of 15.23, reflecting a more favorable valuation. Other peers like Groupon, Inc. and thredUP, Inc. also exhibit negative valuations, but Lulu's performance stands out due to its extreme negative ratios. The company's stock has underperformed significantly against the S&P 500, with a year-to-date return of -66.46%, further reinforcing the notion that it is overvalued in the current market environment.