Is Cintas Corp. overvalued or undervalued?

As of 26 March 2025, Cintas Corp. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a P/E ratio of 63, significantly higher than its peer Booking Holdings, Inc. at 48.64 and Airbnb, Inc. at 32.51. Additionally, Cintas has a Price to Book Value of 24.32 and an EV to EBITDA of 40.75, both of which indicate a premium valuation compared to industry standards.
In comparison to its peers, Cintas Corp. demonstrates a higher EV to EBIT ratio of 49.34, while Booking Holdings and Airbnb have ratios of 33.95 and 28.87, respectively. The company's return on equity (ROE) stands at an impressive 38.59%, yet this high performance does not justify its elevated valuation metrics. Despite recent stock performance showing a 24.71% return over the past year compared to the S&P 500's 10.26%, the valuation suggests that investors may be overestimating future growth potential.