Is Dorman Products, Inc. overvalued or undervalued?

As of 25 July 2025, the valuation grade for Dorman Products, Inc. moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently considered overvalued based on its financial metrics. Key ratios include a P/E ratio of 17, an EV to EBITDA of 10.80, and a PEG ratio of 0.32, which suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, Dorman Products has a higher P/E ratio than Autoliv, Inc. at 18.06 and BorgWarner, Inc. at 11.57, both of which are valued more attractively. Additionally, Dorman's EV to EBITDA ratio of 10.80 is higher than that of Autoliv's 9.21, further reinforcing its overvaluation status. Despite strong recent performance, with a year-to-date return of 22.73% compared to the S&P 500's 12.22%, the stock's elevated valuation metrics suggest it may not sustain this growth in the long term.