Is Community West Bancshares overvalued or undervalued?

As of 20 June 2025, the valuation grade for Community West Bancshares has moved from very expensive to expensive, indicating a slight improvement in its perceived value. The company is currently considered overvalued. Key ratios include a P/E ratio of 27, an EV to EBITDA of 21.51, and a Price to Book Value of 0.92, which are significantly higher than its peers. For instance, Bankwell Financial Group has a P/E of 22.22, while Colony Bankcorp boasts a much lower P/E of 10.42, highlighting the relative overvaluation of Community West Bancshares.
In comparison to its peers, Community West Bancshares' return on equity (ROE) is notably low at 3.39%, further supporting the overvaluation assessment. The company's recent performance has shown a 10.75% return over the past year, which is slightly better than the S&P 500's return of 10.26%, but this does not mitigate the concerns regarding its high valuation metrics relative to the industry.