Is Burke Herbert Financial Services Corp. overvalued or undervalued?

As of 7 May 2024, the valuation grade for Burke Herbert Financial Services Corp. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued based on its financial metrics. The P/E ratio stands at 15, while the industry average P/E is notably lower, with peers such as Equity Bancshares, Inc. at 12.08 and Northeast Bank (Maine) at 8.86, highlighting a substantial premium for Burke Herbert. Additionally, the EV to EBITDA ratio is 16.81, further illustrating its high valuation relative to peers.
In comparison to its competitors, Burke Herbert's PEG ratio of 0.38 suggests that it may not be growing at a rate that justifies its current price, especially when juxtaposed with peers like Camden National Corp. (Maine) at a PEG of 1.27. The company's ROCE of 6.26% and ROE of 7.61% also fall short of what would typically be expected in a more attractively valued firm. While the stock has outperformed the S&P 500 over the past year with a return of 19.91% compared to 10.26%, the overall valuation metrics indicate that Burke Herbert Financial Services Corp. is overvalued in the current market.