Is ReShape Lifesciences, Inc. overvalued or undervalued?

As of 16 August 2021, ReShape Lifesciences, Inc. has moved from a grade of "does not qualify" to "risky," indicating a significant downgrade in its valuation outlook. The company is currently assessed as overvalued given its negative financial metrics, including a P/E ratio that is not applicable due to losses, a price-to-book value of 2.51, and an EV to EBITDA ratio of -0.09. The return on equity (ROE) is alarmingly low at -501.25%, reflecting severe operational challenges.
In comparison to its peers, ReShape Lifesciences shows a less favorable position; for instance, Nexalin Technology, Inc. has a P/E of -2.2805 and an EV to EBITDA of -2.0124, while INVO BioScience, Inc. has an EV to EBITDA of -1.0452. These comparisons highlight that ReShape's valuation metrics are not only poor but also worse than some of its counterparts in the industry. Overall, the financial indicators suggest that ReShape Lifesciences is overvalued in the current market context.