Is Orion Energy Systems, Inc. overvalued or undervalued?

As of 8 November 2022, the valuation grade for Orion Energy Systems, Inc. moved from expensive to risky, indicating a shift in perception regarding its financial health. The company is currently considered overvalued, given its negative P/E ratio and poor return metrics. Key ratios include a Price to Book Value of 1.71, an EV to EBIT of -5.53, and an EV to EBITDA of -9.89, all suggesting significant financial distress.
In comparison to peers, Orion's valuation ratios are less favorable; for instance, Intevac, Inc. has an EV to EBITDA of -1.4985, while GSI Technology, Inc. shows an EV to EBITDA of -4.7369, indicating that Orion is underperforming relative to its competitors. Although specific return data is not available, the lack of positive returns compared to the S&P 500 reinforces the notion that Orion Energy Systems is facing considerable challenges in the market.