Is Optical Cable Corp. overvalued or undervalued?

As of 13 March 2024, the valuation grade for Optical Cable Corp. has moved from fair to risky, indicating a deterioration in its financial outlook. The company appears to be overvalued given its negative performance metrics, including a Price to Book Value of 1.22 and an EV to Sales ratio of 0.46, which suggest that the market may be pricing in expectations that are not supported by current earnings or growth potential. Additionally, the company's ROE stands at -16.08%, further highlighting its struggles.
In comparison to its peers, Optical Cable Corp. has a significantly lower EV to EBITDA ratio of -29.80, while BK Technologies Corp. and Frequency Electronics, Inc. boast more favorable valuations with EV to EBITDA ratios of 25.7386 and 26.8433, respectively. The company's recent stock performance has outpaced the S&P 500, with a YTD return of 147.92% compared to the index's 12.22%, but this does not mitigate the overall valuation concerns.