Is Skillsoft Corp. overvalued or undervalued?

As of 14 September 2021, the valuation grade for Skillsoft Corp. has moved from does not qualify to risky, indicating increased scrutiny on its financial health. The company is currently assessed as overvalued given its significant losses and negative return metrics. Notably, the P/E ratio is not applicable due to the company being loss-making, while the Price to Book Value stands at 1.62, and the EV to EBITDA is at 7.62, which suggests a premium valuation relative to its earnings potential.
In comparison to peers, Skillsoft's EV to EBITDA ratio of 6.63 is relatively favorable, but it still reflects a concerning financial position, especially when considering its ROE of -107.28% and ROCE of -8.22%. Competitors in the industry may offer better returns, making Skillsoft's current valuation less attractive. Additionally, the company's stock has underperformed significantly against the S&P 500, particularly over the past three years, where it has declined by 84.69% compared to the index's 58.74% gain.