Is Zedge, Inc. overvalued or undervalued?

As of 12 June 2023, Zedge, Inc. has moved from an attractive to a risky valuation grade, indicating a significant shift in its financial outlook. The company is currently considered overvalued, primarily due to its negative earnings and poor return metrics. Key ratios include a Price to Book Value of 1.41, an EV to EBITDA of 19.94, and a ROCE of -18.90%.
In comparison to its peers, Zedge's P/E ratio is notably negative at -59.65, while Intellicheck, Inc. also shows a concerning P/E of -103.79, and GAN Ltd. has a more favorable EV to EBITDA of 22.49. Despite Zedge's recent stock performance, which has outpaced the S&P 500 with a year-to-date return of 48.33% compared to the S&P's 2.44%, the underlying financial metrics suggest that the stock is not justified at its current price level of 3.99.