Is Lynx Machinery overvalued or undervalued?

As of 12 November 2024, the valuation grade for Lynx Machinery has moved from does not qualify to risky. The company is currently overvalued, as indicated by its negative PE ratio of -16.41 and an EV to EBIT of -25.25. Additionally, the return on capital employed (ROCE) stands at -5.75%, which further underscores the company's financial challenges.
In comparison to its peers, Lynx Machinery's valuation metrics are significantly weaker. For instance, Rail Vikas has a PE ratio of 69.76 and an EV to EBITDA of 80.38, while Ircon International, which is considered fair, has a PE ratio of 28.25 and an EV to EBITDA of 23.27. Despite a recent stock performance that outpaced the Sensex with a 4.75% return over the past week compared to the Sensex's 1.41%, the overall valuation suggests that Lynx Machinery is not a sound investment at its current price of 167.65.