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, with 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 such as CNH Industrial NV and BorgWarner, Inc. have P/E ratios of 19.42 and 11.57, respectively, highlighting that Arcosa's valuation is substantially higher than its industry counterparts.
Despite a strong dividend yield of 16.76%, the company's return on equity (ROE) stands at only 4.42%, which raises concerns about its profitability relative to its market price. Additionally, while Arcosa has outperformed the S&P 500 over the past three years with a return of 58.01% compared to 81.19%, it has lagged behind in the year-to-date and one-year periods. This suggests that while there may have been some historical strength, the current valuation does not reflect a compelling investment opportunity.