Is Praxis Precision Medicines, Inc. overvalued or undervalued?

As of 9 August 2023, the valuation grade for Praxis Precision Medicines, Inc. has moved from does not qualify to risky, indicating increased uncertainty regarding its financial health. The company appears to be overvalued given its significant losses and poor financial metrics, including a Price to Book Value of 2.07, an EV to Sales ratio of 71.50, and a ROE of -48.40%.
In comparison to its peers, Ocular Therapeutix, Inc. has a more severe P/E ratio of -9.92 and an EV to EBITDA of -8.44, suggesting that both companies are struggling, but Praxis's ratios indicate a relatively less favorable position. Notably, over the past year, Praxis has underperformed against the S&P 500, with a return of -23.83% compared to the index's 17.14%, reinforcing the perception of overvaluation.