Is Veer Energy overvalued or undervalued?

As of 25 April 2023, Veer Energy's valuation grade has moved from does not qualify to risky, indicating a shift in the perception of its investment potential. The company appears to be overvalued at its current price of 19.35, especially when considering its PE ratio of 29.06, which is significantly higher than peers like NTPC, which has a PE of 13.78, and Tata Power Co., with a PE of 31.57. Additionally, Veer Energy's EV to EBITDA stands at -11.64, suggesting negative earnings performance relative to its enterprise value, which further reinforces the overvaluation assessment.
In comparison to its peers, Veer Energy's financial metrics are concerning, particularly its ROCE of -2.46% and ROE of 0.26%, which are substantially lower than industry standards. The company's PEG ratio of 0.00 indicates that there is no growth expected, making it less attractive compared to NTPC's PEG of 1.10. Moreover, the stock has underperformed against the Sensex, with a year-to-date return of -19.68% compared to the Sensex's 5.62%, highlighting the challenges it faces in the current market environment.