Is Standard Motor Products, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Standard Motor Products, Inc. has moved from expensive to very expensive, indicating a significant shift in its market perception. The company appears to be overvalued, as evidenced by its P/E ratio of 11, which is below the peer average of 13.54, and a PEG ratio of 4.26, suggesting that the stock is not priced attractively relative to its growth prospects. Additionally, the EV to EBITDA ratio stands at 7.33, which is lower than some peers like Dorman Products, Inc. at 13.96, further highlighting the relative overvaluation.
In comparison to its peers, LKQ Corp. has a P/E of 12.19 and EV to EBITDA of 8.24, while Visteon Corp. shows a P/E of 21.53 and EV to EBITDA of 14.97, reinforcing the notion that Standard Motor Products, Inc. is trading at a premium despite its lower growth metrics. Over the past year, the stock has returned 21.49%, outperforming the S&P 500's 17.14%, but its long-term performance has lagged significantly, with a 5-year return of -10.94% compared to the S&P 500's 96.61%. This discrepancy suggests that while recent performance may seem favorable, the overall valuation remains concerning.