Is H&E Equipment Services, Inc. overvalued or undervalued?

As of 18 February 2025, the valuation grade for H&E Equipment Services, Inc. has moved from expensive to very expensive. The company is currently overvalued based on its financial metrics. The P/E ratio stands at 34, significantly higher than peers like PennyMac Financial Services, Inc. with a P/E of 13.77 and Nelnet, Inc. at 16.63. Additionally, the EV to EBITDA ratio is 7.74, which is also elevated compared to competitors such as Herc Holdings, Inc. with an EV to EBITDA of 5.34.
Furthermore, the company's Price to Book Value is 5.74, indicating a premium over its book value, while its ROE is 16.73%, suggesting decent profitability but not enough to justify the high valuation. The stock has outperformed the S&P 500 year-to-date with a return of 93.3% compared to the index's 2.44%, but this strong performance does not mitigate the overvaluation indicated by the current ratios.