Is Arcosa, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Arcosa, Inc. has moved from fair to very expensive, indicating a significant shift in its perceived value. The company appears overvalued based on its current metrics, particularly with a P/E ratio of 40, which is substantially higher than peers like CNH Industrial NV at 19.42 and BorgWarner, Inc. at 11.57. Additionally, Arcosa's EV to EBITDA stands at 13.55, which also suggests a premium compared to its industry counterparts.
The dividend yield of 16.76% is attractive, but it does not compensate for the low ROCE of 5.78% and ROE of 4.42%, which highlight inefficiencies in generating returns relative to its equity. In terms of stock performance, Arcosa has underperformed against the S&P 500 over the past year, with a return of -3.11% compared to the index's 14.08%, reinforcing the narrative of overvaluation.