Is Berkshire Hills Bancorp, Inc. overvalued or undervalued?

As of 24 July 2025, the valuation grade for Berkshire Hills Bancorp, Inc. has moved from fair to risky, indicating a shift in perception regarding its financial health and market position. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 11, which is lower than the peer average of approximately 12.92 for similar institutions like 1st Source Corp. and S&T Bancorp, indicating potential overvaluation relative to its peers. Additionally, the PEG ratio of 0.05 suggests that the stock may not be growing at a rate that justifies its price, further supporting the overvaluation thesis.
In comparison to its peers, Customers Bancorp, Inc. has a P/E ratio of 11.99, while Veritex Holdings, Inc. is valued attractively with a P/E of 18.22. Berkshire Hills Bancorp's dividend yield of 255.38% stands out, but it may not be sustainable given the overall financial metrics. Over the past year, the stock has returned -5.21%, significantly underperforming the S&P 500's 17.14% return, reinforcing the notion that the stock may not be a favorable investment at its current price.