Is Gates Industrial Corp. Plc overvalued or undervalued?

As of 17 October 2025, Gates Industrial Corp. Plc's valuation grade has moved from attractive to very expensive, indicating a shift towards overvaluation. The company appears overvalued based on its P/E ratio of 23, which is significantly lower than its peer average of approximately 27.60, and an EV to EBITDA ratio of 10.13, which is also below the peer average of 11.52. Additionally, the Price to Book Value stands at 1.81, suggesting that the market is pricing the company at a premium compared to its book value.
In comparison to its peers, Zurn Elkay Water Solutions Corp. has a P/E ratio of 43.78, while Watts Water Technologies, Inc. shows a P/E of 28.42, both indicating higher valuations within the same industry. Despite its recent strong performance, with a 1Y return of 41.38% compared to the S&P 500's 14.08%, the valuation metrics suggest that Gates Industrial Corp. Plc is currently overvalued.