Is Finward Bancorp overvalued or undervalued?

As of 10 October 2025, the valuation grade for Finward Bancorp has moved from very expensive to expensive, indicating a slight improvement in its valuation outlook. Despite this change, the company remains overvalued based on its current metrics. The P/E ratio stands at 39, significantly higher than the industry average, while the Price to Book Value is at 0.85, suggesting that the stock is trading below its book value. Additionally, the EV to EBITDA ratio is 37.75, indicating a high valuation relative to earnings before interest, taxes, depreciation, and amortization.
In comparison to its peers, Finward Bancorp's P/E ratio of 39 is notably higher than Western New England Bancorp's 20.74 and ESSA Bancorp's 23.54, both of which are considered fairly valued. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of 9.82% compared to the S&P 500's 11.41%, and a three-year return of -8.59% against 81.39% for the index. This underperformance reinforces the notion that Finward Bancorp is currently overvalued.