Is Merus NV overvalued or undervalued?

As of 7 November 2016, Merus NV's valuation grade has moved from does not qualify to risky, indicating a significant shift in its perceived financial health. The company appears to be overvalued given its current financial metrics, including a Price to Book Value of 7.02 and a negative EV to EBITDA of -12.49. Additionally, the Return on Capital Employed (ROCE) stands at a concerning -215.67%, and the Return on Equity (ROE) is at -46.52%, highlighting the company's struggles in generating returns.
In comparison to its peers, Merus NV's P/E ratio is not applicable due to its loss-making status, while CymaBay Therapeutics, Inc. and Arcellx, Inc. show P/E ratios of -35.38 and -21.33, respectively, indicating that they are also facing challenges but with less extreme valuations. The company's recent stock performance has been underwhelming, with a 1-year return of -3.83%, compared to the S&P 500's 10.26% return, reinforcing the notion that Merus NV is overvalued in the current market context.