Is Quanex Building Products Corp. overvalued or undervalued?

As of 4 September 2025, the valuation grade for Quanex Building Products Corp. has moved from fair to risky, indicating a deteriorating outlook. The company appears to be overvalued, particularly when considering its P/E ratio of 46, which is significantly higher than the peer average of 26.26, alongside an EV to EBITDA ratio of 24.48 compared to the peer average of 8.05. Additionally, the company's return on equity (ROE) stands at a low 2.10%, further suggesting challenges in generating shareholder value.
In the context of its peers, Quanex's Price to Book Value of 0.97 and EV to Sales ratio of 1.04 do not provide sufficient justification for its high valuation metrics. The stock has underperformed relative to the S&P 500 across multiple periods, with a year-to-date return of -39.98% compared to the index's 12.22%, highlighting significant underperformance. Overall, these factors reinforce the conclusion that Quanex Building Products Corp. is overvalued in the current market environment.