Is Alamo Group, Inc. overvalued or undervalued?

As of 27 February 2025, the valuation grade for Alamo Group, Inc. has moved from very expensive to expensive, indicating a shift in perception regarding its market valuation. The company is currently considered overvalued. Key ratios include a P/E ratio of 22, an EV to EBITDA of 11.79, and a Price to Book Value of 2.39.
In comparison to its peers, Alamo Group's P/E ratio of 22.85 is significantly higher than Terex Corp.'s fair valuation P/E of 14.35, while Arcosa, Inc. is categorized as very expensive with a P/E of 39.12. Despite a strong one-year return of 21.33% compared to the S&P 500's 10.26%, the current valuation metrics suggest that Alamo Group may not justify its price in the current market environment.