Is Vanta Bioscience overvalued or undervalued?

As of 2 January 2025, the valuation grade for Vanta Bioscience has moved from very expensive to does not qualify, indicating a significant shift in its perceived value. The company appears to be undervalued based on its current financial metrics, including a PE ratio of 16.92, an EV to EBITDA ratio of 11.52, and a PEG ratio of 0.17, which suggests strong growth potential relative to its price.
In comparison to its peers, Vanta's PE ratio is competitive, with the average for similar companies being around 16.92, while its EV to EBITDA ratio aligns closely with industry standards. However, the company's return on equity (ROE) stands at a low 0.25%, which may raise concerns about profitability. Notably, Vanta's stock has underperformed significantly over the past year, declining by 51.74% compared to a 7.57% increase in the Sensex, further emphasizing its current undervaluation status.