Is NeoVolta, Inc. overvalued or undervalued?

As of 10 November 2022, the valuation grade for NeoVolta, Inc. has moved from does not qualify to risky, indicating a significant downgrade in its perceived investment quality. The company is currently assessed as overvalued given its financial metrics, particularly with a Price to Book Value of 27.29 and an EV to Sales ratio of 24.84, which are considerably high compared to industry norms. Additionally, the company's ROCE stands at a concerning -78.87%, and ROE at -107.52%, reflecting substantial losses and inefficiencies.
In comparison to peers, NeoVolta's valuation appears unfavorable; for instance, American Superconductor Corp. has a fair valuation with a P/E of 103.45, while Eos Energy Enterprises, Inc. is also classified as risky with a P/E of -5.56. These comparisons highlight NeoVolta's relative overvaluation, especially considering its negative earnings and high multiples. Furthermore, NeoVolta's stock has underperformed against the S&P 500, with a year-to-date return of -43.95% compared to the index's 2.44%, reinforcing the notion that the stock is overvalued in the current market context.