Is AMCON Distributing Co. overvalued or undervalued?

As of 10 June 2025, the valuation grade for AMCON Distributing Co. has moved from attractive to very expensive, indicating a significant shift in its market perception. The company is currently overvalued based on its financial metrics. The P/E ratio stands at 42, which is notably higher than its peers, such as Distribution Solutions Group, Inc. with a P/E of 42.30 and DXP Enterprises, Inc. at 16.05. Additionally, AMCON's EV to EBITDA ratio of 10.88 also exceeds the industry average, further supporting the overvaluation claim.
In comparison to its peers, AMCON's Price to Book Value is 0.93, which is relatively low, but its ROE of 2.25% and ROCE of 5.34% suggest inefficiencies in generating returns. The company's high dividend yield of 48.18% may attract some investors, but the overall financial ratios indicate that it is not justified given the current market conditions. Recent stock performance shows a decline of 31.72% over the past year compared to a 10.26% return for the S&P 500, reinforcing the notion that AMCON Distributing Co. is overvalued in the current market landscape.