Is Red Cat Holdings, Inc. overvalued or undervalued?

As of 21 December 2020, the valuation grade for Red Cat Holdings, Inc. moved from does not qualify to risky. The company is currently considered overvalued. Key ratios indicate significant financial distress, with a Price to Book Value of 25.66, an EV to EBIT of -22.13, and an EV to EBITDA of -23.39. The company's return metrics are also alarming, with a ROCE of -72.83% and a ROE of -87.37%.
In comparison to peers, Red Cat Holdings has a P/E ratio of -26.35, while Iris Energy Ltd. has a P/E of -67.14 and TeraWulf, Inc. shows a P/E of -12.57, highlighting the overall risky nature of the sector. Notably, Innodata, Inc. stands out as attractive with a P/E of 42.88, suggesting that there are more favorable investment opportunities available. Additionally, Red Cat's stock has experienced a substantial drop of 21.87% over the past week, contrasting sharply with its impressive 603.92% return over the past year, indicating volatility and potential overvaluation in the current market context.