Is Richardson Electronics Ltd. overvalued or undervalued?

As of 9 April 2025, the valuation grade for Richardson Electronics Ltd. has moved from expensive to risky, indicating a deterioration in its valuation outlook. The company appears to be overvalued given its current financial metrics, particularly with a Price to Book Value of 0.86 and an EV to EBITDA ratio of 16.56. Additionally, the EV to Sales ratio stands at 0.47, which suggests that the company is not generating sufficient sales relative to its enterprise value.
In comparison to its peers, Kimball Electronics, Inc. has a much higher P/E ratio of 34.66, while Tigo Energy, Inc. is also classified as risky with a negative P/E of -1.93. This highlights Richardson's relative underperformance in the market. Furthermore, the company's stock has underperformed against the S&P 500 over the year, with a return of -13.29% compared to the index's 17.14%, reinforcing the notion that it is currently overvalued.