Is Techprecision Corp. overvalued or undervalued?

As of 10 May 2022, the valuation grade for Techprecision Corp. has moved from fair to risky, indicating a deterioration in its investment appeal. The company appears to be overvalued, particularly given its negative financial metrics, including a Price to Book Value of 4.29 and an EV to Sales ratio of 1.29, which suggest that investors are paying a premium despite the company's losses. Additionally, the ROCE stands at -31.16%, and the ROE is a staggering -98.52%, further highlighting the company's financial struggles.
In comparison to its peers, Techprecision Corp. has a significantly lower EV to EBITDA ratio of -19.20, while Graham Corp. and Natural Gas Services Group, Inc. have fair valuations with EV to EBITDA ratios of 23.99 and 7.23, respectively. This stark contrast underscores the risks associated with Techprecision Corp.'s current valuation. Despite a strong year-to-date return of 48.49% compared to the S&P 500's 12.22%, the company's long-term performance has been lackluster, with a 3-year return of -5.24% versus the S&P 500's 70.41%, reinforcing concerns about its sustainability and overall valuation.