Is Arcosa, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Arcosa, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company appears to be overvalued based on its current metrics, including a P/E ratio of 40, an EV to EBITDA of 13.55, and a Price to Book Value of 1.78. In comparison, peers like CNH Industrial NV have a P/E ratio of 19.42, while BorgWarner, Inc. shows a much lower P/E of 11.57, highlighting Arcosa's relative overvaluation in the market.
Despite a YTD return of 0.2%, which lags behind the S&P 500's 12.22%, Arcosa has performed well over the longer term with a 5Y return of 113.5% compared to the S&P 500's 96.61%. However, the current valuation metrics suggest that investors may be paying a premium for the stock that is not justified by its earnings potential.