Is STERIS Plc (Ireland) overvalued or undervalued?

As of 14 May 2025, STERIS Plc (Ireland) has moved from a valuation grade of very expensive to expensive. The company is currently considered overvalued based on its financial metrics. The P/E ratio stands at 34, which is significantly higher than the peer average of approximately 32.29, while the EV to EBITDA ratio of 25.84 also exceeds the peer average of 16.95. Additionally, the PEG ratio of 1.28 suggests that the stock is priced higher relative to its earnings growth potential compared to peers like Edwards Lifesciences Corp., which has a PEG of 19.49.
In comparison to its peers, STERIS Plc's valuation appears stretched, especially when looking at companies like Agilent Technologies, Inc. and Zimmer Biomet Holdings, which are valued more favorably with P/E ratios of 25.22 and 24.58, respectively. Furthermore, the company's recent stock performance has lagged behind the S&P 500, particularly over the past month, where it reported a return of -2.51% compared to the S&P 500's 3.83%. This combination of high valuation ratios and underperformance relative to the market reinforces the conclusion that STERIS Plc is overvalued at its current price of 236.91.