Is Fabrinet overvalued or undervalued?

As of 14 November 2025, the valuation grade for Fabrinet has moved from very attractive to attractive, indicating a shift in its perceived value. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 27, which is significantly higher than its peer Skyworks Solutions, Inc. at 20.61. Additionally, Fabrinet's EV to EBITDA ratio stands at 21.90, while Rambus, Inc. shows a lower ratio of 26.99, further suggesting that Fabrinet may be priced too high relative to its peers.
In terms of performance, Fabrinet has demonstrated impressive returns, with a year-to-date return of 87.98% compared to the S&P 500's 14.49%, and a three-year return of 231.85% versus the S&P 500's 70.17%. This strong performance contrasts with its current valuation metrics, reinforcing the notion that the stock may be overvalued. Overall, while Fabrinet has shown robust growth, its valuation ratios suggest caution for potential investors.