Is Viracta Therapeutics, Inc. overvalued or undervalued?

As of 24 February 2021, the valuation grade for Viracta Therapeutics, Inc. moved from risky to does not qualify, indicating a significant deterioration in its valuation outlook. The company is currently considered overvalued given its negative price-to-book value of -0.10 and an EV to EBITDA ratio of 0.08, which suggests that the market is not pricing in any potential for recovery or profitability. The return on capital employed (ROCE) is exceptionally high at 429.14%, but this is misleading due to the company's loss-making status.
In comparison to its peers, Viracta's valuation metrics are concerning; for instance, Solid Biosciences, Inc. has a P/E of -2.6812, while Instil Bio, Inc. shows a P/E of -3.7811, both indicating similar struggles within the sector. The company's stock has significantly underperformed against the S&P 500, with a year-to-date decline of 89.93% compared to the index's modest gain of 2.44%. Overall, Viracta Therapeutics, Inc. appears to be overvalued in the current market environment.