Is BorgWarner, Inc. overvalued or undervalued?

As of 6 February 2025, the valuation grade for BorgWarner, 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 8, an EV to EBITDA of 5.44, and a PEG ratio of 0.22, which suggest that despite some attractive metrics, the overall valuation is not justified when compared to its peers.
In comparison, CNH Industrial NV has a P/E of 15.72 and an EV to EBITDA of 9.85, while BWX Technologies, Inc. shows a much higher P/E of 67.35, indicating that BorgWarner's valuation is out of sync with its industry peers. Additionally, the company's recent stock performance has lagged behind the S&P 500, particularly over the past year, where it returned -1.15% compared to the S&P 500's 10.26%. This further reinforces the notion that BorgWarner, Inc. is overvalued in the current market environment.