Is Kimball Electronics, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Kimball Electronics, Inc. has moved from attractive to very expensive, indicating a shift towards overvaluation. The company is currently considered overvalued based on its P/E ratio of 20, which is significantly lower than the peer average of approximately 34.66, and an EV to EBITDA ratio of 6.83, which also falls short of the peer benchmark of 9.82. Additionally, the Price to Book Value stands at 0.97, suggesting that the market may not be fully recognizing the company's asset value.
In comparison to its peers, Kimball Electronics shows a lower return on equity (ROE) of 4.76% and a return on capital employed (ROCE) of 8.79%, which raises concerns about its profitability relative to competitors. Despite a strong year-to-date return of 51.15%, which outpaces the S&P 500's 13.30%, the longer-term performance shows a stark contrast, with a 3-year return of 54.36% compared to the S&P's 81.19%. This discrepancy further emphasizes the potential overvaluation of Kimball Electronics in the current market environment.