Is Provident Financial Services, Inc. overvalued or undervalued?

As of 12 May 2025, the valuation grade for Provident Financial Services, Inc. has moved from fair to very attractive, indicating a significant improvement in its perceived value. The company is currently considered undervalued, with a P/E ratio of 12, which is lower than peers such as Northwest Bancshares, Inc. at 12.93 and Capitol Federal Financial, Inc. at 14.60. Additionally, Provident's price to book value stands at 0.87, suggesting that the stock is trading below its intrinsic value.
Key ratios further support this undervaluation narrative, with an EV to EBITDA of 17.42 and a robust dividend yield of 313.15%. The company's return on equity (ROE) is at 7.26%, which, while modest, reflects the potential for growth compared to its peers. Notably, despite a challenging year-to-date performance of -11.50% against the S&P 500's 2.44%, the one-year return of 23.80% indicates a strong recovery trajectory, reinforcing the attractiveness of the current valuation.