Is Sono-Tek Corp. overvalued or undervalued?

As of 30 June 2025, Sono-Tek Corp. has moved from an expensive to a very expensive valuation grade. The company appears to be overvalued, with a P/E ratio of 46, a Price to Book Value of 3.24, and an EV to EBIT ratio of 45.34. In comparison, Graham Corp. has a P/E of 41.09 and an EV to EBITDA of 23.99, indicating that Sono-Tek's valuation metrics are significantly higher than its peers.
The company's recent stock performance shows a 1-month return of 24.32%, outperforming the S&P 500's 2.33% return in the same period, but its longer-term performance is concerning, with a 3-year return of -46.54% compared to the S&P 500's 70.41%. This suggests that while there may be short-term gains, the overall valuation remains unsustainable given the high ratios relative to industry peers.