Is Research Frontiers, Inc. overvalued or undervalued?

As of 1 August 2024, the valuation grade for Research Frontiers, Inc. has moved from does not qualify to risky. The company appears to be overvalued based on its financial metrics, particularly given its negative performance indicators. The price-to-book value stands at 27.62, while the EV to EBIT and EV to EBITDA ratios are notably negative at -54.30 and -65.80, respectively. Furthermore, the return on capital employed (ROCE) is a concerning -100.33%, indicating significant inefficiencies.
In comparison with peers, Research Frontiers, Inc. has a less favorable outlook than The Lovesac Co., which holds a fair valuation with a P/E ratio of 18.56, and Flexsteel Industries, Inc., which is rated attractive with a P/E of 8.01. The company's stock has underperformed against the S&P 500, with a year-to-date return of -1.75% compared to the index's 2.44%. Overall, these factors suggest that Research Frontiers, Inc. is overvalued in its current market position.