Is Riot Platforms, Inc. overvalued or undervalued?

As of 1 May 2025, the valuation grade for Riot Platforms, Inc. has moved from attractive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued, given its negative P/E ratio and concerning return metrics, such as a ROCE of -12.11% and a ROE of -11.97%. Key ratios include a Price to Book Value of 1.20, an EV to EBIT of -9.73, and an EV to Sales of 8.29, which further highlight the challenges the company faces.
In comparison to its peers, Riot Platforms, Inc. has a significantly lower EV to EBITDA ratio of -52.9492 than Varonis Systems, Inc. at -58.8171, but it also lags behind more favorable companies like Q2 Holdings, Inc., which boasts an attractive EV to EBITDA of 62.8126. Despite the company's impressive stock performance, with a 1Y return of 144.21% compared to the S&P 500's 17.14%, the underlying financial metrics suggest that the stock may not be sustainable at its current valuation levels.