Is Heidrick & Struggles International, Inc. overvalued or undervalued?

As of 23 May 2025, the valuation grade for Heidrick & Struggles International, Inc. has moved from attractive to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios include a P/E ratio of 11, an EV to EBITDA of 6.07, and a PEG ratio of 0.31, which suggests that while the company has strong earnings growth potential, its current pricing does not justify its valuation relative to its earnings.
In comparison to peers, Heidrick & Struggles has a P/E ratio of 11.21, which is significantly lower than Barrett Business Services, Inc. at 20.28, indicating that Heidrick may not be priced to reflect its growth potential. Additionally, while the company has a robust ROCE of 50.87%, its valuation metrics suggest that it is trading at a premium compared to its peers, which further supports the conclusion of being overvalued. Over the past year, Heidrick & Struggles has outperformed the S&P 500 with a return of 26.57% compared to 10.26%, but this may not be sustainable given its current valuation.