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

As of 30 June 2025, the valuation grade for Simpson Manufacturing Co., Inc. has moved from expensive to very expensive, indicating a significant concern regarding its current pricing. The company is considered overvalued based on its P/E ratio of 22, which is notably lower than its peer SPX Technologies, Inc. at 45.73, and its EV to EBITDA ratio of 12.96, which is also less favorable compared to A. O. Smith Corp. at 17.71. Additionally, the Price to Book Value stands at 3.52, further highlighting the premium investors are paying relative to the company's book value.
In terms of performance, while Simpson Manufacturing has shown a strong 3-year return of 125.12%, it has underperformed against the S&P 500 in the past year, returning -1.50% compared to the index's 17.14%. This discrepancy reinforces the notion that the stock may be overvalued, as its recent performance does not justify the high valuation ratios when compared to its peers.