Is Dorman Products, Inc. overvalued or undervalued?

As of 20 June 2025, the valuation grade for Dorman Products, Inc. has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued. Key ratios include a P/E ratio of 17, an EV to EBITDA of 10.80, and a PEG ratio of 0.32, which suggests that despite a relatively low PEG, the overall valuation metrics do not support the current price level.
In comparison to peers, Dorman Products, Inc. has a higher P/E ratio than Goodyear Tire & Rubber Co., which stands at 7.57, highlighting the premium investors are paying for Dorman's shares. Additionally, the EV to EBITDA ratio of 10.80 further emphasizes the overvaluation when compared to industry norms. While Dorman has shown a strong return of 34.10% over the past year, this performance is overshadowed by the broader market's gains, suggesting that the stock's current price may not be justified.