Is Norwood Financial Corp. overvalued or undervalued?

As of 1 May 2025, the valuation grade for Norwood Financial Corp. has moved from very attractive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a P/E ratio of 204, which starkly contrasts with its peers such as Orrstown Financial Services, Inc. at 10.88 and Northrim BanCorp, Inc. at 11.25. Additionally, Norwood's EV to EBITDA ratio stands at 193.98, further emphasizing its high valuation relative to the industry.
In comparison to its peers, Norwood Financial Corp. exhibits a Price to Book Value of 1.09 and a dividend yield of 4.08%, which may attract some investors, but the overall financial metrics suggest a lack of sustainable profitability, as evidenced by its ROCE of 0.03% and ROE of 0.53%. The company's recent stock performance, with a YTD return of -6.60% compared to the S&P 500's 2.44%, reinforces the notion that the stock is overvalued in the current market context.