Is Franklin Electric Co., Inc. overvalued or undervalued?

As of 30 April 2024, Franklin Electric Co., Inc. has moved from a fair to an expensive valuation grade. The company appears to be overvalued based on its current metrics, which include a P/E ratio of 21, a Price to Book Value of 3.04, and an EV to EBITDA of 12.60. In comparison to its peers, Franklin Electric's P/E ratio of 23.22 is higher than that of MKS Instruments, Inc. at 23.90 and significantly lower than Zurn Elkay Water Solutions Corp. at 43.78, indicating a relative overvaluation within its industry.
Recent stock performance further supports this valuation assessment, as Franklin Electric has underperformed against the S&P 500, with a year-to-date return of -1.31% compared to the index's 12.22%. This trend is also evident over one year, where the company returned -5.16% against the S&P 500's 17.14%. Overall, the combination of high valuation ratios and poor relative stock performance suggests that Franklin Electric is currently overvalued.