Is AAON, Inc. overvalued or undervalued?

As of 29 August 2024, the valuation grade for AAON, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a P/E ratio of 50, which is substantially higher than its peers such as ITT, Inc. at 22.89 and The Middleby Corp. at 18.43. Additionally, AAON's EV to EBITDA stands at 30.62, compared to Woodward, Inc. at 31.10, further highlighting its premium valuation.
In terms of performance metrics, AAON's ROCE is 18.18% and ROE is 19.47%, which are respectable figures but do not justify the high valuation multiples it commands. The stock has underperformed relative to the S&P 500 over the past year, with a return of -8.63% compared to the index's 10.26%. This combination of high valuation ratios and poor relative performance suggests that AAON, Inc. is indeed overvalued in the current market context.