Is NewAmsterdam Pharma Co. NV overvalued or undervalued?

As of 8 May 2024, the valuation grade for NewAmsterdam Pharma Co. NV has moved from does not qualify to risky, indicating increased concerns about its financial health. The company is currently considered overvalued, primarily due to its negative earnings and poor return metrics. The P/E ratio is not applicable as the company is loss-making, while its Price to Book Value stands at 2.91, and both the EV to EBIT and EV to EBITDA ratios are significantly negative at -7.70, highlighting the lack of profitability.
In comparison to peers, NewAmsterdam Pharma's valuation metrics are concerning. For instance, Ardelyx, Inc. has a P/E ratio of -15.85 and an EV to EBITDA of -21.07, also indicating risk, while Keros Therapeutics, Inc. is in a more favorable position with a P/E of 129.79 and an EV to EBITDA of 19.05, showcasing its strong performance relative to NewAmsterdam. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -29.14% compared to the index's 2.44%, reinforcing the view that NewAmsterdam Pharma is overvalued in its current state.