Is Highway Holdings Ltd. overvalued or undervalued?

As of 7 August 2025, the valuation grade for Highway Holdings Ltd. has moved from expensive to attractive, indicating a shift towards a more favorable assessment. The company appears undervalued, supported by a P/E ratio of 8, a PEG ratio of 0.07, and an EV to Sales ratio of 0.42, all of which suggest that the stock is trading at a significant discount relative to its earnings and growth potential.
In comparison to peers, Highway Holdings Ltd. has a lower P/E ratio than Matthews International Corp. at 255.76 and Myers Industries, Inc. at 19.46, which are both considerably higher. Additionally, Highway's EV to EBITDA of -3.10 stands in stark contrast to Omega Flex, Inc. at 14.18, further highlighting its relative undervaluation. Despite this attractive valuation, the company's stock has underperformed against the S&P 500 over various periods, including a YTD return of -13.25% compared to the S&P 500's 12.22%, which underscores the need for cautious optimism regarding its future performance.