Is nLIGHT, Inc. overvalued or undervalued?

As of 19 February 2020, the valuation grade for nLIGHT, Inc. changed from expensive to risky, indicating a shift toward a more cautious outlook. The company appears to be overvalued, given its high Price to Book Value of 4.09 and negative EV to EBITDA of -19.71, which suggests that investors are paying a premium despite the company's losses. Additionally, nLIGHT's Return on Capital Employed (ROCE) stands at a concerning -47.43%, further highlighting its struggles in generating returns.
In comparison to its peers, nLIGHT's valuation metrics are significantly less favorable; for instance, Semtech Corp. has a P/E ratio of 70.91, while Impinj, Inc. boasts an impressive EV to EBITDA of 547.91. The company's recent stock performance has outpaced the S&P 500, with a year-to-date return of 197.43% compared to the S&P 500's 12.22%, but this does not mitigate the underlying valuation concerns.