Is Provident Bancorp, Inc. (Massachusetts) overvalued or undervalued?

As of 12 May 2025, the valuation grade for Provident Bancorp, Inc. has moved from expensive to very expensive. The company is currently overvalued, with a P/E ratio of 46, significantly higher than its peers such as Southern Missouri Bancorp, Inc. at 10.82 and Northfield Bancorp, Inc. at 21.25. Additionally, the EV to EBIT ratio stands at 42.22, while the EV to EBITDA ratio is 35.84, both indicating a premium valuation compared to the industry.
The Price to Book Value ratio of 0.88 suggests that the stock is trading near its book value, but when combined with the low ROCE of 2.08% and ROE of 1.91%, it raises concerns about the sustainability of such a high valuation. Recent stock performance shows that Provident Bancorp has outperformed the S&P 500 over the past year with a return of 22.88% compared to 10.26%, but this does not mitigate the overvaluation indicated by the current financial metrics.