Is Franklin Financial Services Corp. (Pennsylvania) overvalued or undervalued?

As of 2 May 2025, Franklin Financial Services Corp. (Pennsylvania) has moved from a valuation grade of very expensive to expensive. The company is currently considered overvalued based on its financial metrics. The P/E ratio stands at 15, while the industry average P/E is notably higher at approximately 13.94, indicating that the company is trading at a premium compared to its peers. Additionally, the Price to Book Value is 1.14, and the EV to EBITDA ratio is 11.06, both of which suggest a higher valuation relative to its earnings and book value.
In comparison with peers, ChoiceOne Financial Services, Inc. has a P/E ratio of 16.34, while First Internet Bancorp is valued more favorably at 9.60. This disparity highlights that Franklin Financial Services is not only overvalued relative to its own historical metrics but also when compared to its competitors. Despite a strong one-year stock return of 21.13% compared to the S&P 500's 10.26%, the overall valuation suggests that the stock may not sustain its current price levels in the long term.