Is Zymeworks, Inc. overvalued or undervalued?

As of 6 March 2024, Zymeworks, Inc. has moved from an attractive to a risky valuation grade, indicating a shift in investor sentiment towards the company. The current analysis suggests that Zymeworks is overvalued given its financial metrics. The price-to-book value stands at 2.72, while the EV to EBITDA ratio is -6.53, and the ROCE is a concerning -171.02%.
In comparison to its peers, Zymeworks' valuation ratios are significantly weaker; for instance, Harrow, Inc. has an EV to EBITDA of 60.41, while Evolus, Inc. shows an EV to EBITDA of -21.94, both indicating more favorable valuations in their respective contexts. Additionally, Zymeworks' recent stock performance has been underwhelming, with a year-to-date return of -14.82%, contrasting with a 2.44% gain in the S&P 500, further reinforcing the notion of overvaluation in light of its current financial struggles.