Is Xencor, Inc. overvalued or undervalued?

As of 23 February 2023, the valuation grade for Xencor, Inc. has moved from expensive to risky, indicating a significant shift in perception regarding its financial health. The company is currently considered overvalued. Key ratios reveal a Price to Book Value of 1.07, an EV to EBIT of -2.25, and an EV to EBITDA of -2.42, all of which suggest that the company is struggling to generate positive earnings and is facing substantial financial challenges.
In comparison to its peers, Xencor's valuation metrics are concerning. For instance, BioCryst Pharmaceuticals, Inc. has a P/E ratio of -39.02, while Arcus Biosciences, Inc. shows an EV to EBITDA of 0.0371, both indicating that the industry is grappling with similar issues. Additionally, Xencor's recent stock performance has been poor, with a year-to-date return of -63.40%, significantly underperforming the S&P 500's 2.44% return. This further reinforces the notion that Xencor is overvalued given its current financial standing and market performance.