Is Finward Bancorp overvalued or undervalued?

As of 28 May 2025, Finward Bancorp's valuation grade has moved from very expensive to expensive, indicating a slight improvement in perceived value but still suggesting it is not a bargain. The company is currently overvalued, with a P/E ratio of 39, significantly higher than its peers such as Western New England Bancorp, Inc. at 16.35 and ESSA Bancorp, Inc. at 20.69. Additionally, the EV to EBITDA ratio stands at 37.75, further highlighting the premium valuation relative to the industry.
The Price to Book Value of 0.85 and a negative ROCE of -2.01% raise concerns about the company's efficiency and profitability. While Finward Bancorp has outperformed the S&P 500 over the past year with a return of 17.17% compared to 10.26%, the long-term performance shows a decline of 22.26% over three years, which may deter potential investors. Overall, the combination of high valuation ratios and underwhelming returns suggests that Finward Bancorp is overvalued in the current market.