Is Kimball Electronics, Inc. overvalued or undervalued?

As of 7 November 2025, the valuation grade for Kimball Electronics, Inc. has moved from very expensive to expensive, indicating a slight improvement in perceived value but still suggesting overvaluation. The company appears overvalued based on its P/E ratio of 20, which is significantly higher than the peer average of approximately 34.66, and an EV to EBITDA ratio of 6.83, which is also lower than the peer average of 9.82. Additionally, the Price to Book Value stands at 0.97, suggesting that the stock is trading close to its book value, yet still reflects an expensive valuation in the current market context.
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 further supports the notion of overvaluation when considering its performance metrics. While the company has outperformed the S&P 500 with a year-to-date return of 45.38% compared to the index's 14.40%, its longer-term performance over three and five years shows a stark contrast, with returns of 26.01% and 106.60% respectively, against the S&P's 76.76% and 91.73%. This disparity highlights that despite recent gains, the stock may not be justified at its current price level.