Is Federated Hermes, Inc. overvalued or undervalued?

As of 31 July 2025, the valuation grade for Federated Hermes, Inc. has moved from fair to very attractive, indicating a positive shift in its valuation outlook. The company appears undervalued, especially when considering its P/E ratio of 13, which is significantly lower than the peer average, and its PEG ratio of 1.26, suggesting growth potential at a reasonable price. Additionally, the EV to EBITDA ratio stands at 6.82, further supporting the notion of undervaluation relative to its peers.
In comparison to its peers, Federated Hermes, Inc. has a P/E ratio of 13.69, while Blue Owl Capital, Inc. is very expensive at 140.14, and Janus Henderson Group Plc is at 17.06, indicating that Federated Hermes offers a more attractive valuation. The company's recent performance shows a YTD return of 29.68%, outperforming the S&P 500's return of 12.22%, and a 1Y return of 48.99% compared to the S&P 500's 17.14%. This strong performance reinforces the undervaluation narrative, suggesting that the market may not fully recognize the company's growth potential.