Is Tvardi Therapeutics, Inc. overvalued or undervalued?

As of 1 March 2022, the valuation grade for Tvardi Therapeutics, Inc. moved from attractive to risky, indicating a shift in perception regarding its valuation. The company appears to be overvalued, with a P/E ratio of -9.66 and an EV/EBITDA of -10.10, both of which are significantly below industry norms. The absence of a PEG ratio further complicates the valuation picture, suggesting a lack of growth potential relative to its price.
In comparison to its peers, Tvardi Therapeutics is underperforming; for instance, its P/E ratio is notably worse than the industry average, which typically reflects more stable companies. The stock has shown impressive returns recently, with a 1-year return of 276.26% compared to the S&P 500's 17.14%, but this is overshadowed by its long-term performance, where it has declined by 92.59% over the past five years. This stark contrast highlights the volatility and potential risks associated with investing in Tvardi Therapeutics.