Is Luna Innovations, Inc. overvalued or undervalued?

As of 16 May 2022, Luna Innovations, Inc. has moved from an expensive to a risky valuation grade. The company is currently considered undervalued, particularly given its low Price to Book Value of 0.30 and EV to Sales ratio of 0.48. However, its P/E ratio remains not applicable due to losses, and the EV to EBIT ratio is notably high at 56.49, indicating potential concerns regarding profitability.
In comparison to peers, Luna's valuation metrics appear less favorable, with PAR Technology Corp. showing a P/E of -34.42 and Diebold Nixdorf, Inc. at a P/E of 38.77. The overall peer group reflects a risky valuation status, which aligns with Luna's current standing. Despite a significant decline in stock performance over the past year, where it has dropped 78.2% compared to the S&P 500's 10.26% increase, the current pricing suggests that Luna Innovations, Inc. may present an opportunity for investors looking for undervalued stocks in a challenging market environment.