Is Mastercraft Boat Holdings, Inc. overvalued or undervalued?

As of 6 February 2025, the valuation grade for Mastercraft Boat Holdings, Inc. has moved from attractive to risky, indicating a significant shift in its financial outlook. The company is currently overvalued, with a P/E ratio of 40, which is considerably higher than its peers such as Marine Products Corp. at 21.79 and Sturm, Ruger & Co., Inc. at 27.74. Additionally, the EV to EBITDA ratio stands at 16.95, suggesting that investors are paying a premium for earnings before interest, taxes, depreciation, and amortization.
In comparison to its peers, Mastercraft's financial metrics reveal concerning trends, particularly with a return on capital employed (ROCE) of only 3.18% and a return on equity (ROE) of 4.04%. These figures highlight inefficiencies in generating returns relative to its equity and capital employed. Furthermore, the company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -4.35% compared to the index's 2.44%, reinforcing the notion that Mastercraft may be overvalued in the current market environment.