Is Penta Gold overvalued or undervalued?

As of 26 April 2024, Penta Gold's valuation grade has moved from does not qualify to risky, indicating a significant deterioration in its financial standing. The company is currently overvalued, as evidenced by its troubling financial ratios, including a PE ratio of -0.69, an EV to EBITDA of -53.45, and a ROE of -21.21%. These figures suggest that the company is struggling to generate profits and is not effectively utilizing its equity.
In comparison to its peers, Penta Gold's valuation stands out unfavorably. For instance, Titan Co. Ltd. has a fair valuation with a PE ratio of 94.61 and an EV to EBITDA of 57.21, while Kalyan Jewellers is considered expensive with a PE of 81.3 and an EV to EBITDA of 40.48. The stark contrast in these ratios highlights Penta Gold's precarious position within the gems and jewelry industry. Additionally, the company's stock has significantly underperformed over the past three years, with a return of -98.19%, further reinforcing the notion that it is overvalued relative to the broader market.