Is Northern Technologies International Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Northern Technologies International Corp. has moved from attractive to very expensive. This indicates that the company is currently overvalued. The P/E ratio stands at 18, which is significantly lower than the peer average of 23.60 for companies like Aspen Aerogels, Inc. and Montauk Renewables, Inc., which have P/E ratios of 29.81 and 50.38, respectively. Additionally, the EV to EBITDA ratio of -36.54 further highlights the company's challenging valuation position compared to peers.
The company has shown poor performance in recent periods, with a year-to-date return of -45.00%, starkly contrasting with the S&P 500's return of 13.30% during the same timeframe. This underperformance, coupled with a return on equity (ROE) of 5.71% and a return on capital employed (ROCE) of -5.06%, reinforces the notion that Northern Technologies International Corp. is not only overvalued but also struggling to generate adequate returns for its shareholders.