Is Wolfspeed, Inc. overvalued or undervalued?

As of 24 January 2017, the valuation grade for Wolfspeed, Inc. has moved from expensive to risky, indicating a significant shift in its financial outlook. The company is currently considered overvalued given its troubling financial metrics, including a Price to Book Value of 1.02 and an EV to Sales ratio of 7.10, which suggests that investors are paying a premium for the stock despite its poor performance. Notably, the ROCE stands at -9.43% and the ROE is an alarming -453.97%, highlighting the company's struggles to generate returns.
In comparison to its peer, IPG Photonics Corp., which has a P/E ratio of -17.15 and an EV to EBITDA of 31.89, Wolfspeed's metrics appear significantly weaker. The negative P/E ratio of Wolfspeed further emphasizes its loss-making status, making it less attractive in the current market environment. Given these factors, Wolfspeed, Inc. is deemed overvalued, particularly in light of its substantial stock decline of 90.79% year-to-date, contrasting sharply with the S&P 500's modest gain of 2.44% during the same period.