Is TransAct Technologies, Inc. overvalued or undervalued?

As of 8 August 2024, the valuation grade for TransAct Technologies, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued given its negative P/E ratio and poor returns on capital, with a Price to Book Value of 1.67 and an EV to Sales ratio of 0.90. In comparison to peers, TransAct's EV to EBITDA stands at -27.13, while Backblaze, Inc. has a ratio of -38.1755, and Xerox Holdings Corp. shows a more favorable EV to EBITDA of 8.8040.
Despite a recent stock return of 12.03% over the past month, which outperformed the S&P 500's 2.33%, the longer-term performance reveals a concerning trend, with a 5-year return of -2.66% compared to the S&P 500's 96.61%. This suggests that while there may be short-term gains, the overall valuation and financial metrics indicate that TransAct Technologies, Inc. is overvalued.