Is Southwest Gas Holdings, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Southwest Gas Holdings, Inc. has moved from fair to very expensive, indicating that the stock is overvalued. Key valuation ratios reveal a P/E ratio of 23, an EV to EBITDA of 10.02, and a Price to Book Value of 1.43, all suggesting a premium valuation compared to peers. For instance, New Jersey Resources Corp. has a significantly lower P/E of 11.53, while ONE Gas, Inc. shows an EV to EBITDA of 10.34, both indicating that Southwest Gas is priced higher than its competitors.
In terms of stock performance, Southwest Gas has underperformed relative to the S&P 500 over the past year, returning 7.61% compared to the index's 17.14%, and over three years, it has declined by 2.75% while the S&P 500 surged by 70.41%. This performance, combined with the high valuation ratios, reinforces the conclusion that the company is overvalued.