Is Holley, Inc. overvalued or undervalued?

As of 11 March 2025, the valuation grade for Holley, Inc. has moved from fair to risky, indicating a potential concern regarding its current market position. The company appears to be overvalued, particularly when considering its P/E ratio of 12, which is significantly higher than the peer average of 9.51 for American Axle & Manufacturing Holdings, Inc. Additionally, Holley's EV to EBITDA ratio stands at 6.84, while its peers like American Axle show a more favorable ratio of 4.02, further suggesting a premium valuation. The PEG ratio of 4.28 also indicates that the stock may be overvalued relative to its growth prospects.
In comparison to its peers, Holley, Inc. is positioned unfavorably, especially against American Axle, which is rated attractive with a lower P/E and PEG ratio. The stock's recent performance shows a 10.36% return over the past week, significantly outpacing the S&P 500's return of 1.05%, but this short-term gain contrasts with a longer-term decline of 36.02% over three years compared to the S&P's 70.41% increase. This disparity reinforces the notion that Holley, Inc. may not be a sound investment at its current valuation.