Is Pentair plc overvalued or undervalued?

As of 4 February 2025, Pentair plc's valuation grade has moved from fair to expensive, indicating a shift in its perceived value. The company is currently assessed as overvalued. Key ratios include a P/E ratio of 22, an EV to EBITDA of 17.37, and a PEG ratio of 2.48, all of which suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, Pentair's P/E ratio of 21.53 is lower than Graco, Inc.'s 28.63 and IDEX Corp.'s 31.10, but it remains on the higher end of the spectrum. Additionally, the company's ROE stands at 20.24%, which is strong, yet its high Price to Book Value of 4.51 raises concerns about overvaluation. While Pentair has outperformed the S&P 500 over the past year with a return of 25.28% compared to the index's 10.26%, the current valuation metrics suggest caution for potential investors.