Is Graco, Inc. overvalued or undervalued?

As of 18 February 2025, Graco, Inc. has moved from a fair valuation to an expensive rating. The company is currently overvalued, with a P/E ratio of 29, which is higher than the industry average. Key ratios include a Price to Book Value of 5.74 and an EV to EBITDA of 20.37, both indicating a premium valuation relative to peers.
In comparison, IDEX Corp. has a P/E of 31.10 and an EV to EBITDA of 19.47, while Entegris, Inc. is even more expensive with a P/E of 40.08. Despite Graco's strong ROCE of 29.39% and ROE of 19.69%, its valuation metrics suggest that it is trading at a premium. Additionally, Graco's recent stock performance has lagged behind the S&P 500 over the past year, which reinforces the notion of its overvaluation.