Is LSI Industries, Inc. overvalued or undervalued?

As of 21 August 2025, the valuation grade for LSI Industries, Inc. has moved from very expensive to expensive, indicating a shift towards a less favorable valuation outlook. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 21, which is significantly lower than its peer Quanex Building Products Corp. at 26.26, and an EV to EBITDA ratio of 11.86 compared to the peer's 8.05. Additionally, the Price to Book Value stands at 2.25, suggesting that the stock is priced at a premium relative to its book value.
In terms of performance, LSI Industries, Inc. has outperformed the S&P 500 across multiple time frames, with a 1Y return of 49.55% compared to the S&P 500's 17.14%, and a remarkable 5Y return of 219.48% against the benchmark's 96.61%. This strong performance may indicate investor confidence, but the valuation ratios suggest that the stock is currently overvalued relative to its peers and the broader market.