Is Spruce Biosciences, Inc. overvalued or undervalued?

As of 15 May 2023, the valuation grade for Spruce Biosciences, Inc. has moved from does not qualify to risky, indicating increased uncertainty regarding its valuation. The company appears to be overvalued, particularly given its low Price to Book Value of 0.18 and an EV to EBITDA ratio of 0.37, which suggests that investors are paying a premium relative to its earnings potential. Additionally, the ROCE stands at an impressive 670.25%, yet the negative ROE of -361.86% raises concerns about profitability and financial health.
In comparison to its peers, Spruce Biosciences has a P/E ratio that is not applicable due to its loss-making status, while CARA Therapeutics, Inc. has a P/E of -9.4978 and NGM Biopharmaceuticals, Inc. shows a P/E of -0.9351, highlighting the challenging environment for these companies. Over the past year, Spruce Biosciences has significantly underperformed, with a stock return of -73.54% compared to a 17.14% return for the S&P 500, reinforcing the notion that the stock may be overvalued in the current market context.