Is ESCO Technologies, Inc. overvalued or undervalued?

As of 7 August 2025, the valuation grade for ESCO Technologies, Inc. has moved from fair to very expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 47, a Price to Book Value of 4.39, and an EV to EBITDA of 25.39, all of which are significantly higher than many of its peers. For instance, Nova Ltd. has a P/E of 34.30, while Onto Innovation, Inc. shows a more reasonable P/E of 20.49, highlighting the premium ESCO commands in comparison to its industry.
In terms of performance, ESCO Technologies has outperformed the S&P 500 across multiple time frames, with a year-to-date return of 63.46% compared to the S&P 500's 12.22%, and a one-year return of 76.32% against 17.14%. However, despite these impressive returns, the high valuation ratios suggest that the stock may not be a sustainable investment at its current price levels.