Is N2N Technologies overvalued or undervalued?

As of 3 March 2025, the valuation grade for N2N Technologies has moved from risky to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a price-to-earnings (PE) ratio of 4.79, an EV to EBIT ratio of 4.93, and a price-to-book value of 0.86. These ratios suggest that the company is not only priced high relative to its earnings but also has a low return on capital employed (ROCE) of 0.17% and a return on equity (ROE) of 0.36%, which are notably low compared to industry standards.
In comparison with peers, N2N Technologies' valuation appears excessive, especially when contrasted with Life Insurance, which has a PE ratio of 12.54 and is rated fair. Other peers like Bajaj Finance and Bajaj Finserv are classified as very expensive with PE ratios of 35.01 and 35.83, respectively, but they also exhibit stronger financial metrics. The recent stock performance shows a decline of 32.1% over the past year, contrasting sharply with the Sensex's return of 7.61%, further supporting the conclusion that N2N Technologies is overvalued in the current market context.