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. The company appears to be overvalued based on its current financial metrics. The P/E ratio stands at 15, while the peer comparison shows an average P/E of approximately 16.69 for Electro-Sensors, indicating it is priced higher than its peers. Additionally, the EV to EBITDA ratio of 4.70 is notably higher than the industry average, suggesting a premium valuation. The PEG ratio of 1.21 further supports this view, as it indicates that the stock may not be justified at its current price given its growth prospects.
In comparison to its peers, Profire Energy, Inc. is considered attractive with a P/E of 14.05, while Babcock & Wilcox Enterprises, Inc. shows a risky valuation with a P/E of -2.60. This highlights that Electro-Sensors, Inc. is not only overvalued relative to its peers but also underperforming in terms of returns. Over the past year, the stock has returned 18.99%, slightly trailing the S&P 500's 19.89%, and over the last five years, it has returned 32.02%, significantly lower than the S&P 500's 109.18%.