Is ProPhase Labs, Inc. overvalued or undervalued?

As of 10 August 2023, the valuation grade for ProPhase Labs, Inc. has moved from expensive to risky, indicating a significant deterioration in its financial standing. The company appears to be overvalued, particularly given its negative P/E ratio and troubling returns on capital, with a ROCE of -119.77% and an ROE of -149.07%. The Price to Book Value stands at 1.25, while the EV to Sales ratio is notably high at 2.53, suggesting that investors are paying a premium despite the company's losses.
In comparison to its peers, ProPhase Labs, Inc. has a less favorable valuation profile, with Chromadex Corp. showing a P/E of 39.82 and EV to EBITDA of 36.56, indicating a more robust market position. Similarly, LifeVantage Corp. is valued more attractively with a P/E of 14.81 and EV to EBITDA of 8.26. The company's stock has underperformed significantly against the S&P 500, with a year-to-date return of -44.83% compared to the index's 12.22%, and a staggering 1-year return of -82.95% versus 17.14% for the S&P 500.