Is inTEST Corp. overvalued or undervalued?

As of 2 May 2025, the valuation grade for inTEST Corp. has moved from expensive to risky, indicating a shift in perception regarding its valuation. The company appears to be overvalued based on its high P/E ratio of 77, which significantly exceeds the peer average, and an EV to EBITDA ratio of 11.03, suggesting that investors are paying a premium for earnings relative to its peers. Additionally, the Price to Book Value stands at 0.78, which, while not excessively high, still reflects a valuation that may not be justified given the company's low ROCE of 0.37% and ROE of 0.21%.
In comparison with peers, Transcat, Inc. has a P/E of 54.10, while Babcock & Wilcox Enterprises, Inc. shows a risky valuation with a P/E of -2.60. These comparisons reinforce the notion that inTEST Corp. is not only overvalued but also underperforming relative to its industry benchmarks. Furthermore, while inTEST Corp. has shown a strong 1-week return of 9.92% compared to the S&P 500's 1.05%, its year-to-date return of -8.38% starkly contrasts with the S&P 500's 12.22%, highlighting potential concerns about its future performance.