Is Gates Industrial Corp. Plc overvalued or undervalued?

As of 17 October 2025, the valuation grade for Gates Industrial Corp. Plc has moved from attractive to very expensive, indicating a significant shift in its perceived value. The company appears to be overvalued based on its current metrics, with a P/E ratio of 23, an EV to EBITDA of 10.13, and a Price to Book Value of 1.81. In comparison to peers, Zurn Elkay Water Solutions Corp. has a much higher P/E of 43.78, while Watts Water Technologies, Inc. shows a more favorable P/E of 28.42, highlighting that Gates is priced at a premium relative to some competitors.
Despite the overvaluation, Gates Industrial has shown strong returns, outperforming the S&P 500 with a year-to-date return of 26.06% compared to the index's 13.30%. This performance, however, does not mitigate the concerns regarding its high valuation metrics, suggesting that investors may be paying a premium that is not justified by its current financial performance.