Is Research Solutions, Inc. overvalued or undervalued?

As of 9 November 2023, the valuation grade for Research Solutions, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company's current valuation suggests it is overvalued, particularly given its high Price to Book Value of 8.01 and an EV to EBITDA ratio of 25.94, which is significantly higher than that of peers like FONAR Corp., which has an EV to EBITDA of 2.16, and Where Food Comes From, Inc. at 20.40. Additionally, the company is loss-making, reflected by its NA P/E ratio and a negative ROE of -10.03%.
The peer comparison further highlights the challenges faced by Research Solutions, Inc., as it is categorized as risky with a P/E of -79.64, contrasting sharply with FONAR Corp.'s attractive valuation at a P/E of 8.12. The company's recent stock performance has been underwhelming, with a year-to-date return of -34.22%, which starkly contrasts with the S&P 500's positive return of 2.44% over the same period. Overall, these metrics suggest that Research Solutions, Inc. is not only overvalued but also faces significant operational challenges that could hinder its recovery.