Is First Business Financial Services, Inc. overvalued or undervalued?

As of 24 July 2025, the valuation grade for First Business Financial Services, Inc. has moved from very attractive to attractive, indicating a shift in perceived value. The company appears to be fairly valued based on its current metrics. The P/E ratio stands at 10, which is lower than the industry average, while the PEG ratio is notably low at 0.37, suggesting potential for growth relative to its price. Additionally, the Price to Book Value is 1.31, indicating that the stock is trading slightly above its book value.
In comparison to peers, ACNB Corp. has a P/E ratio of 13.51, while Home Bancorp, Inc. is at 10.68, both of which suggest that First Business Financial Services, Inc. is competitively priced within its industry. Despite a strong performance with a 5-year return of 249.60%, which significantly outpaces the S&P 500's 96.61% over the same period, the company's recent stock performance has lagged behind the index in the 1-year and 3-year periods. This mixed performance underscores the need for cautious optimism regarding its valuation.