Is Opal Luxury overvalued or undervalued?

As of 25 April 2023, Opal Luxury's valuation grade has moved from does not qualify to risky, indicating a significant deterioration in its financial standing. The company appears to be overvalued given its negative PE ratio of -1.89, an EV to EBITDA of -4.24, and an ROE of -462.80%. These ratios suggest that the company is struggling to generate profits and is not effectively utilizing its equity.
In comparison to its peers, Opal Luxury's valuation metrics starkly contrast with those of Altius Telecom, which boasts a PE ratio of 52.97, and Sagility India, which has a PE of 33.73, both indicating more favorable financial health. The disparity in these ratios further reinforces the conclusion that Opal Luxury is overvalued. Additionally, the company's stock has underperformed significantly over the past five years, with a return of -46.25% compared to the Sensex's 150.07%, highlighting the challenges it faces in the current market environment.