Is Electro-Sensors, Inc. overvalued or undervalued?

As of 21 May 2025, the valuation grade for Electro-Sensors, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued. Key ratios include a P/E ratio of 15, an EV to EBITDA of 4.70, and a ROE of 2.59%.
In comparison to peers, Electro-Sensors, Inc. has a P/E ratio that is higher than Profire Energy, Inc. at 14.05, but lower than its own valuation grade suggests. The company’s EV to EBIT ratio is notably negative at -4.70, highlighting financial concerns. While Electro-Sensors has shown a 1-week return of 1.92% compared to the S&P 500's -0.13%, its year-to-date performance is concerning at -17.76%, further supporting the notion that it is overvalued in the current market context.