Is NV5 Global, Inc. overvalued or undervalued?

As of 25 February 2025, NV5 Global, Inc. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued based on its financial metrics. The P/E ratio stands at 47, significantly higher than peers like Dycom Industries, Inc. at 28.83 and Sterling Infrastructure, Inc. at 23.94. Additionally, NV5's EV to EBITDA ratio is 14.26, while the industry average suggests a more reasonable valuation would be closer to the 10-12 range.
In comparison to its peers, NV5 Global, Inc. exhibits a higher EV to EBIT ratio of 35.34, indicating that investors are paying a premium for its earnings relative to its competitors. The company's return on capital employed (ROCE) is notably low at 4.51%, which further supports the notion of overvaluation. While NV5 has shown a year-to-date return of 18.95%, this is overshadowed by the S&P 500's return of 2.44%, highlighting a potential disconnect between stock performance and intrinsic value.