Is Erie Indemnity Co. overvalued or undervalued?

As of 1 August 2025, the valuation grade for Erie Indemnity Co. moved from very expensive to expensive, indicating a shift towards a more cautious outlook. The company appears overvalued based on its current metrics, with a P/E ratio of 41, significantly higher than peers such as W.R. Berkley Corp. at 22.84 and Markel Group, Inc. at 11.12. Additionally, the Price to Book Value stands at 12.35, and the EV to EBITDA ratio is 36.50, both suggesting that the stock is trading at a premium compared to its industry counterparts.
In terms of performance, Erie Indemnity Co. has underperformed relative to the S&P 500 across multiple time frames, with a year-to-date return of -22.47% compared to the S&P 500's 12.22%. This trend of underperformance reinforces the notion that the stock may be overvalued given its high valuation ratios and disappointing returns.