Is NextCure, Inc. overvalued or undervalued?

As of 6 May 2021, the valuation grade for NextCure, Inc. has moved from risky to does not qualify, indicating a significant downgrade in its investment appeal. The company is currently considered overvalued, primarily due to its negative financial metrics. The P/E ratio is not applicable as the company is loss-making, while the Price to Book Value stands at 0.25, and the EV to EBITDA is at 0.82. Additionally, the ROE is a concerning -88.66%, highlighting the company's struggles to generate returns.
In comparison to its peers, NextCure's valuation metrics are less favorable. For instance, Rezolute, Inc. has an EV to EBITDA of -3.4613, and SELLAS Life Sciences Group, Inc. shows an EV to EBITDA of -4.5726, both indicating significant challenges in profitability. The company's recent stock performance has also been poor, with a year-to-date return of -39.04%, contrasting sharply with the S&P 500's positive return of 2.44% during the same period. This further reinforces the view that NextCure is overvalued in the current market context.