Is Skillsoft Corp. overvalued or undervalued?

As of 14 September 2021, the valuation grade for Skillsoft Corp. moved from does not qualify to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued given its financial metrics, particularly with a Price to Book Value of 1.62 and a negative EV to EBIT ratio of -13.40, which suggests significant operational challenges. Additionally, the EV to EBITDA ratio stands at 7.62, which, while not excessively high, does not compensate for the company's negative returns on capital and equity, with ROCE at -8.22% and ROE at -107.28%.
In comparison to its peers, Skillsoft's valuation ratios are concerning; for instance, its peer has an EV to EBITDA of 6.59, indicating that Skillsoft is trading at a premium despite its losses. The stock's performance has been lackluster, with a year-to-date return of -38.56% compared to the S&P 500's positive return of 12.22%, reinforcing the notion that the stock is overvalued in the current market context.