Is Nortech Systems, Inc. overvalued or undervalued?

As of 31 March 2025, the valuation grade for Nortech Systems, Inc. has moved from fair to risky, indicating a significant deterioration in its financial health. The company appears to be overvalued, particularly given its negative valuation ratios, including a Price to Book Value of 0.75, an EV to EBITDA of -37.33, and an EV to Sales of 0.31.
In comparison to its peers, Nortech Systems' EV to EBITDA ratio of -37.33 is worse than LENSAR, Inc. at -12.34 and Singular Genomics Systems, Inc. at 0.55, both of which also carry a risky valuation. Additionally, the company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -8.36% compared to the index's 12.22%, further reinforcing the notion of overvaluation.