Is Electro-Sensors, Inc. overvalued or undervalued?

As of 3 October 2025, the valuation grade for Electro-Sensors, Inc. has moved from expensive to fair. Based on the current metrics, the company appears to be fairly valued. The P/E ratio stands at 15, the Price to Book Value is 1.03, and the EV to EBITDA is 4.70, which suggests that the stock is reasonably priced relative to its earnings and book value.
In comparison to its peers, Electro-Sensors has a P/E ratio of 16.69, which is higher than Profire Energy, Inc. at 14.05, indicating a slight premium in valuation. However, it is worth noting that the company has a negative ROCE of -1.69%, which is concerning. Additionally, while the stock has outperformed the S&P 500 with a 1-year return of 23.35% compared to the index's 17.82%, it has lagged behind in the longer term, with a 5-year return of 38.23% versus the S&P 500's 100.56%.