Is Electro-Sensors, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for Electro-Sensors, Inc. has moved from very attractive to fair, indicating a shift in its perceived value. The company appears to be overvalued based on its current metrics. Key ratios include a P/E ratio of 15, an EV to EBITDA of 4.70, and a PEG ratio of 1.21, which suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, Electro-Sensors, Inc. has a higher P/E ratio than Profire Energy, Inc. at 14.0480, which is considered attractive, and significantly higher than Babcock & Wilcox Enterprises, Inc. which has a negative P/E of -2.6009. The company's recent stock performance shows a 1-year return of 21.50%, slightly outperforming the S&P 500's return of 19.89%, but a year-to-date return of -9.25% indicates underperformance relative to the index's 16.30% gain. Overall, these factors reinforce the conclusion that Electro-Sensors, Inc. is currently overvalued.