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. The company appears to be overvalued based on its current metrics. The P/E ratio stands at 20, while the industry average P/E is significantly higher at approximately 34.66, indicating a premium valuation. Additionally, the EV to EBITDA ratio of 6.83 suggests that the company is trading at a higher multiple compared to its peers, which further supports the overvaluation thesis.
In comparison to its peers, Kimball Electronics has a lower EV to EBIT of 11.09, while the industry average is around 9.82, highlighting a discrepancy in valuation. The return performance shows that, while Kimball Electronics has outperformed the S&P 500 year-to-date with a return of 51.15% compared to 13.30%, its longer-term performance over 10 years is significantly lower at 127.94% vs. 227.77%. This suggests that despite recent strong returns, the valuation metrics indicate that the stock may not be justified at its current price levels.