Is thredUP, Inc. overvalued or undervalued?

As of 8 November 2021, thredUP, Inc. moved from a "does not qualify" to a "risky" valuation grade, indicating a significant downgrade in its investment appeal. The company appears to be overvalued, as evidenced by its Price to Book Value of 16.28 and negative ratios such as EV to EBIT at -20.95 and EV to EBITDA at -46.09. In comparison to peers, thredUP's P/E ratio is notably negative at -41.89, while ACV Auctions, Inc. also carries a risky valuation with a P/E of -31.02, highlighting the challenges both companies face.
Despite the company's impressive year-to-date return of 666.91% compared to the S&P 500's 12.22%, the underlying financial metrics suggest that thredUP is not a sound investment at its current valuation. The significant losses reflected in its ROCE of -136.23% and ROE of -74.22% further reinforce the notion that thredUP is overvalued in the current market landscape.