Is Surmodics, Inc. overvalued or undervalued?

As of 31 July 2024, Surmodics, Inc. has moved from an attractive to a risky valuation grade, indicating a significant deterioration in its financial outlook. The company appears to be overvalued, with a Price to Book Value of 3.81 and an EV to EBITDA ratio of 91.89, which suggests that investors are paying a high premium for its earnings potential despite its current losses. Additionally, the negative ROE of -10.26% and ROCE of -3.57% further highlight the challenges the company faces in generating returns for shareholders.
In comparison to its peers, Surmodics, Inc. has a notably high EV to Sales ratio of 3.45, while Castle Biosciences, Inc. and Silk Road Medical, Inc. have ratios of 22.3090 and -18.1243, respectively, indicating that Surmodics is not only struggling but also priced higher relative to its revenue generation capabilities. The recent stock performance has been poor, with a year-to-date return of -18.64% compared to the S&P 500's positive return of 12.22%, reinforcing the notion that the stock is currently overvalued.