Is Ecovyst, Inc. overvalued or undervalued?

As of 27 February 2025, the valuation grade for Ecovyst, Inc. has moved from fair to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued, given its P/E ratio of 16, which is significantly lower than the industry average, and an EV to EBITDA ratio of 9.27, which is comparable to peers like Hawkins, Inc. at 18.73. Additionally, Ecovyst's ROCE stands at 6.34% and ROE at 8.68%, which are relatively modest compared to the expectations for growth in this sector.
In comparison to its peers, Ecovyst's valuation metrics highlight its risky status, particularly when juxtaposed with Hawkins, Inc., which boasts a P/E of 33.59, suggesting a more favorable investment outlook. Another peer, Genesis Energy LP, is also classified as risky but has a drastically negative P/E ratio, further emphasizing Ecovyst's challenges. While Ecovyst has shown a slight positive return over the past week and month, its longer-term performance has lagged behind the S&P 500, indicating potential concerns for investors considering its current valuation.