Is CPI Aerostructures, Inc. overvalued or undervalued?

As of 19 August 2025, the valuation grade for CPI Aerostructures, Inc. has moved from fair to risky, indicating a deterioration in its investment appeal. The company appears to be overvalued based on its P/E ratio of 21, which is higher than the peer average of 23.76, and an EV to EBITDA ratio of 7.92, which suggests that the market may be pricing in excessive growth expectations. Additionally, the ROE of 7.25% and ROCE of 11.22% are relatively low compared to peers like TAT Technologies Ltd., which has a P/E of 33.36 and an EV to EBITDA of 20.02.
In terms of stock performance, CPI Aerostructures has underperformed against the S&P 500 over various periods, with a year-to-date return of -36.54% compared to the S&P 500's 12.22%. This trend reinforces the notion that the stock may be overvalued, as investors are not being compensated for the risk given the company's poor performance relative to the broader market.