Is Norwood Financial Corp. overvalued or undervalued?

As of 3 October 2025, the valuation grade for Norwood Financial Corp. has moved from very expensive to expensive, indicating a slight improvement but still reflecting a high valuation. The company appears to be overvalued, especially when considering its P/E ratio of 204, which is significantly higher than peers like Orrstown Financial Services, Inc. at 10.63 and Northrim BanCorp, Inc. at 11.11. Additionally, the EV to EBITDA ratio stands at 193.98, further emphasizing the premium at which Norwood is trading compared to its industry.
With a Price to Book Value of 1.09 and a Dividend Yield of 4.08%, the company does offer some attractive features; however, the low ROE of 0.53% and ROCE of 0.03% suggest inefficiencies in generating returns. Over the past year, Norwood has underperformed the S&P 500, with a return of -3.52% compared to the index's 17.82%, reinforcing the notion that the stock may not be a compelling investment at its current valuation.