Is Upstart Holdings, Inc. overvalued or undervalued?

As of 14 February 2023, the valuation grade for Upstart Holdings, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued, given its high Price to Book Value of 7.64 and negative EV to EBIT and EV to EBITDA ratios of -52.35 and -64.95, respectively. Additionally, the Return on Capital Employed (ROCE) stands at -8.72%, further highlighting the challenges the company faces.
In comparison to its peers, Upstart's valuation ratios are concerning; for instance, MakeMyTrip Ltd. has a P/E ratio of 95.54, while XP, Inc. boasts a very attractive P/E of 11.30. The stark contrast in performance metrics suggests that Upstart is not performing favorably against its competitors. Notably, Upstart has outperformed the S&P 500 in the past year with a return of 77.63% compared to the index's 17.14%, but this strong performance does not mitigate the concerns regarding its valuation.