Is Verrica Pharmaceuticals, Inc. overvalued or undervalued?

As of 7 November 2022, Verrica Pharmaceuticals, Inc. has moved from a grade of "does not qualify" to "risky." The company is currently considered overvalued given its negative financial ratios, including a price-to-book value of -3.05 and an EV to EBITDA of -1.28. The company's return on equity (ROE) is also negative, indicating a lack of profitability, which further supports the overvaluation stance.
In comparison to its peers, Verrica's valuation metrics are significantly worse than those of Rigel Pharmaceuticals, Inc., which has a P/E ratio of 9.21 and an EV to EBITDA of 7.02, categorizing it as "very attractive." Gossamer Bio, Inc. is also in the "risky" category but has a less negative EV to EBITDA of -4.36. Additionally, Verrica's stock has underperformed against the S&P 500, with a one-year return of -92.12% compared to the index's gain of 10.26%. Overall, these factors indicate that Verrica Pharmaceuticals is overvalued in the current market environment.