Is ChoiceOne Financial Services, Inc. overvalued or undervalued?

As of 12 May 2025, the valuation grade for ChoiceOne Financial Services, Inc. has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued, with a P/E ratio of 17, an EV to EBIT of 18.92, and an EV to EBITDA of 16.31. These ratios suggest that the stock is trading at a premium compared to its earnings and cash flow generation capabilities.
In comparison to its peers, ChoiceOne's P/E ratio is notably higher than Colony Bankcorp, Inc., which has a P/E of 10.42, and Penns Woods Bancorp, Inc., at 10.14, both of which are considered attractive. Additionally, the company's return on equity (ROE) stands at 5.91%, which is lower than the industry average, further supporting the notion of overvaluation. Despite a recent positive stock performance relative to the S&P 500 over one week, the longer-term trends show a decline, with a year-to-date return of -20.03%, contrasting sharply with the S&P 500's 2.44% gain.