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 appears to be overvalued based on its financial metrics. Key ratios include a Price to Book Value of -3.05, an EV to EBIT of -1.25, and an EV to EBITDA of -1.28, indicating significant negative valuations compared to traditional benchmarks.
In comparison to peers, Verrica's valuation ratios are less favorable, with Gossamer Bio, Inc. showing a P/E of -4.3771 and an EV to EBITDA of -4.1514, while Rigel Pharmaceuticals, Inc. is very attractive with a P/E of 7.4943 and an EV to EBITDA of 6.4016. The stark contrast in these ratios highlights Verrica's challenging position within the industry. Additionally, the company's stock has significantly underperformed against the S&P 500, with a one-year return of -78.16% compared to the index's 17.14%, reinforcing the view of overvaluation.