Is Fox Factory Holding Corp. overvalued or undervalued?

As of 8 May 2025, the valuation grade for Fox Factory Holding Corp. moved from fair to risky, indicating a significant shift in its perceived financial health. The company is currently deemed overvalued, with a P/E ratio of 42, which is substantially higher than peers like Dana, Inc. at 69.07 and Adient plc at 8.68. Additionally, Fox's EV to EBITDA stands at 11.39, while its ROCE and ROE are relatively low at 4.48% and 2.89%, respectively, further supporting the overvaluation assessment.
In comparison to its peers, Fox Factory's valuation metrics suggest it is not performing favorably, especially given the industry's average P/E and EV to EBITDA ratios. The company's recent stock performance has also been poor, with a year-to-date return of -18.80%, significantly lagging behind the S&P 500's return of 2.44%. This combination of high valuation ratios and disappointing returns reinforces the conclusion that Fox Factory Holding Corp. is overvalued in the current market environment.