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, indicating a more cautious outlook. The company appears to be overvalued given its high Price to Book Value of 27.62 and negative metrics such as an EV to EBIT of -54.30 and a ROE of -46.52%. Compared to peers, Arhaus, Inc. has a more favorable P/E ratio of 22.58 and Flexsteel Industries, Inc. shows a P/E of 9.47, highlighting the relative weakness of Research Frontiers in the market.
The company's stock has underperformed significantly against the S&P 500, with a 1-year return of -23.50% compared to the index's 17.14%, and a staggering -51.72% return over the past five years versus the S&P's 96.61%. This stark contrast reinforces the notion that Research Frontiers, Inc. is currently overvalued in its sector.