Is Rocky Mountain Chocolate Factory, Inc. overvalued or undervalued?

As of 11 April 2022, the valuation grade for Rocky Mountain Chocolate Factory, Inc. has moved from fair to risky, indicating a deterioration in its financial health. The company appears to be overvalued at its current price of $1.42, especially given its negative P/E ratio and troubling performance metrics. Key ratios include a Price to Book Value of 0.92, an EV to EBIT of -3.00, and an ROE of -49.01%, all of which suggest significant operational challenges.
In comparison to its peers, Rocky Mountain Chocolate Factory, Inc. stands out negatively against companies like Seneca Foods Corp., which has a fair valuation and a P/E of 22.78, and John B. Sanfilippo & Son, Inc., which is rated attractive with a P/E of 13.33. The stark contrast in performance and valuation metrics highlights the company's struggles within its industry. Furthermore, the company's stock has underperformed significantly against the S&P 500 over various time frames, with a year-to-date return of -41.56% compared to the index's 2.44%.