Is Granite Construction, Inc. overvalued or undervalued?

As of 8 August 2025, the valuation grade for Granite Construction, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company appears to be overvalued, as evidenced by its P/E ratio of 25, which is notably higher than peers such as MasTec, Inc. with a P/E of 57.22 and Sterling Infrastructure, Inc. at 28.27. Additionally, Granite's EV to EBITDA ratio stands at 13.23, while its PEG ratio is exceptionally low at 0.23, suggesting that despite high earnings expectations, the stock price may not be justified.
In comparison to its peers, Granite Construction's valuation metrics indicate a premium, particularly when looking at the EV to EBIT ratio of 21.59, which is higher than the industry average. The company's recent performance has been strong, with a year-to-date return of 24.96%, significantly outpacing the S&P 500's 12.22% during the same period. However, the overall valuation suggests caution, as the stock is trading at elevated levels compared to its industry counterparts.