Is Northern Technologies International Corp. overvalued or undervalued?

As of 15 August 2025, the valuation grade for Northern Technologies International Corp. has moved from expensive to very expensive, indicating a significant concern regarding its valuation. The company appears to be overvalued, especially when considering its P/E ratio of 18, which is notably lower than its peer Aspen Aerogels, Inc. at 29.81, and the EV to EBITDA ratio of -36.54, which is substantially worse than the industry average. Additionally, the Price to Book Value stands at 1.00, which does not suggest any compelling value proposition compared to its peers.
In the context of its recent performance, Northern Technologies has underperformed against the S&P 500 across multiple time frames, with a year-to-date return of -41.88% compared to the S&P 500's 12.22%. This stark contrast further reinforces the notion that the stock is overvalued, as it struggles to deliver returns in a rising market environment.