Is NSTS Bancorp, Inc. overvalued or undervalued?

As of 13 November 2023, NSTS Bancorp, Inc. has moved from a fair to risky valuation grade, indicating a significant deterioration in its financial outlook. The company is currently considered overvalued, particularly given its negative earnings metrics and poor return ratios. Key ratios include a Price to Book Value of 0.84, an EV to EBIT of -6.62, and an EV to Sales of 0.72, all of which suggest that the company is struggling to generate positive financial results.
In comparison to its peers, NSTS Bancorp's valuation stands out negatively; for instance, HMN Financial, Inc. has a P/E ratio of 21.55, while Finward Bancorp boasts a P/E of 37.33, highlighting the stark contrast in performance and valuation. The company's recent stock performance has outpaced the S&P 500 over the past year, with a return of 28.9% compared to the index's 10.26%, but this does not mitigate the underlying valuation concerns. Overall, NSTS Bancorp appears to be overvalued in the current market context.