Is Lincoln Educational Services Corp. overvalued or undervalued?

As of 12 May 2025, the valuation grade for Lincoln Educational Services Corp. has moved from expensive to very expensive, indicating a significant increase in perceived valuation. The company is currently overvalued, with a P/E ratio of 86, which is substantially higher than its peers, such as Universal Technical Institute, Inc. with a P/E of 31.55 and Emerald Holding, Inc. at 41.37. Additionally, Lincoln's EV to EBITDA stands at 26.76, compared to Universal Technical Institute's 13.60, further highlighting the disparity in valuation metrics.
The company's Price to Book Value is 4.86, and its ROE is 5.67%, which are both concerning when juxtaposed with its high valuation. The recent performance of Lincoln Educational Services Corp. has been impressive, with a 1-year return of 120.96%, significantly outpacing the S&P 500's 10.26% return. However, despite this strong performance, the high valuation ratios suggest that the stock may not be a sustainable investment at its current price levels.