Is XOMA Corp. overvalued or undervalued?

As of 9 March 2023, the valuation grade for XOMA Corp. has moved from very attractive to risky, indicating a significant shift in its financial outlook. The company is currently assessed as overvalued. Key ratios highlight this concern, with a Price to Book Value of 3.57, an EV to EBIT of -11.91, and an ROCE of -25.84%. These figures suggest that the company is struggling to generate positive returns and is not performing well relative to its capital employed.
In comparison to its peers, XOMA Corp. exhibits a notably negative P/E ratio of -29.55, while Fusion Pharmaceuticals, Inc. has a less severe P/E of -17.58, and Rigel Pharmaceuticals, Inc. stands out with a P/E of 9.21, classified as very attractive. This stark contrast underscores XOMA's current challenges in profitability and market perception. Additionally, while XOMA's stock has shown some resilience with a 1-year return of 7.24% compared to the S&P 500's 10.26%, the overall valuation metrics suggest that investors should approach with caution.