Is Zentalis Pharmaceuticals, Inc. overvalued or undervalued?

As of 7 May 2024, Zentalis Pharmaceuticals, Inc. has moved from a grade of "does not qualify" to "risky." The company is currently considered overvalued based on its financial metrics. Key ratios include a Price to Book Value of 0.37, an EV to EBIT of 1.12, and an EV to EBITDA of 1.13, indicating that while the company has low valuation multiples, its financial health remains concerning due to significant losses.
In comparison to its peers, Zentalis has a negative P/E ratio of -0.51, while Dynavax Technologies Corp. shows a P/E of 52.88, illustrating a stark contrast in market perception and profitability. Additionally, Prothena Corp. Plc has an EV to EBITDA of 0.80, further highlighting Zentalis's relative overvaluation. The company's stock has underperformed significantly against the S&P 500, with a year-to-date return of -57.1% compared to the index's 2.44%, reinforcing the notion of its overvaluation in the current market environment.