Is First Financial Bankshares, Inc. overvalued or undervalued?

As of 17 April 2025, the valuation grade for First Financial Bankshares, Inc. has moved from very expensive to expensive, indicating a shift in perception regarding its market valuation. The company is currently considered overvalued. Key ratios include a P/E ratio of 23, a Price to Book Value of 3.13, and an EV to EBITDA of 15.54, which are significantly higher than those of its peers.
In comparison, Old National Bancorp has a P/E of 13.15 and Cadence Bank has a P/E of 9.89, both of which suggest that First Financial Bankshares is trading at a premium relative to its competitors. Additionally, while the company has a strong ROCE of 33.79% and a high dividend yield of 195.23%, these figures do not sufficiently justify its elevated valuation metrics. Recent stock performance shows that while the company has outperformed the S&P 500 over the past year, it has lagged over longer periods, reinforcing the notion that it may be overvalued at its current price of 35.67.