Is HEICO Corp. overvalued or undervalued?

As of 18 June 2025, HEICO Corp. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a P/E ratio of 55, significantly higher than its peers such as Lockheed Martin Corp. at 20.24 and General Dynamics Corp. at 32.81. Additionally, HEICO's EV to EBITDA stands at 34.64, while Lockheed Martin's is considerably lower at 14.61, further highlighting the disparity in valuation.
Notably, HEICO's PEG ratio is 1.58, which, while not excessively high, still indicates that the stock may be priced for growth that may not materialize at the expected rate. The company's return on equity (ROE) is 16.86%, which is strong, yet it does not justify the high valuation relative to its peers. In the past year, HEICO has outperformed the S&P 500 with a return of 40.46% compared to the index's 10.26%, but this performance does not mitigate the concerns regarding its current overvaluation.