Is Badger Meter, Inc. overvalued or undervalued?

As of 21 April 2025, the valuation grade for Badger Meter, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios include a P/E ratio of 69, an EV to EBITDA of 44.94, and a PEG ratio of 2.23, all of which are substantially higher than industry norms.
In comparison to its peers, Badger Meter's P/E ratio of 67.82 is notably higher than Woodward, Inc. at 42.64 and The Middleby Corp. at 18.43, which highlights its overvaluation. Additionally, while Badger Meter has a strong ROCE of 33.47% and ROE of 20.92%, these metrics do not justify its high valuation relative to peers. Despite its recent stock performance, which has outpaced the S&P 500 over the past year, the current valuation suggests that investors may be overestimating its growth potential.