Is MaxLinear, Inc. overvalued or undervalued?

As of 25 October 2023, the valuation grade for MaxLinear, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued, given its negative profitability metrics and high valuation ratios. Key ratios include a Price to Book Value of 2.15, an EV to EBIT of -7.03, and an EV to EBITDA of -9.55, all of which suggest significant financial challenges.
In comparison to its peers, MaxLinear, Inc. shows a stark contrast; for instance, Tower Semiconductor Ltd. has a fair P/E ratio of 37.63, while Cirrus Logic, Inc. boasts an attractive P/E of 17.26. The negative returns over multiple periods further reinforce this valuation narrative, as MaxLinear's year-to-date return of -15.57% significantly lags behind the S&P 500's 12.22%, and its 3-year return of -51.64% starkly contrasts with the S&P 500's 70.41%.