Is Simpson Manufacturing Co., Inc. overvalued or undervalued?

As of 28 April 2025, the valuation grade for Simpson Manufacturing Co., Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a P/E ratio of 22, a Price to Book Value of 3.52, and an EV to EBITDA of 12.96. These ratios suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Simpson's P/E ratio of 22 is notably lower than Watsco, Inc. at 32.52 and The AZEK Co., Inc. at 48.78, both of which are also classified as very expensive. However, it is higher than Masco Corp., which has a P/E of 15.28 and is considered risky. Additionally, Simpson's return over the past year has lagged behind the S&P 500, with a decline of 8.06% compared to the index's gain of 10.26%. This further reinforces the view that the stock is overvalued in the current market environment.