Is Kimball Electronics, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for Kimball Electronics, Inc. moved from fair to very expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 20, which is significantly lower than its peer Aehr Test Systems, which has a P/E of approximately 34.66. Additionally, the EV to EBITDA ratio stands at 6.83, while the industry average is not provided, suggesting a potential premium valuation compared to peers. The Price to Book Value is 0.97, which is relatively close to parity but still indicates a higher valuation in the context of the overall market.
In terms of performance, Kimball Electronics has shown a year-to-date return of 55.23%, significantly outperforming the S&P 500's return of 16.30% over the same period. However, over the past three years, the company's return of 40.66% lags behind the S&P 500's 76.66%, reinforcing the notion that while the stock has performed well recently, its current valuation may not be justified given its longer-term performance relative to the benchmark. Overall, Kimball Electronics appears to be overvalued based on the current metrics and peer comparisons.