Is Stock Yards Bancorp, Inc. overvalued or undervalued?

As of 23 July 2025, the valuation grade for Stock Yards Bancorp, Inc. has moved from fair to risky, indicating a shift towards a more negative outlook. The company appears to be overvalued, with a P/E ratio of 18, which is higher than the average P/E ratios of its peers such as Trustmark Corp. at 11.24 and Banner Corp. at 12.84. Additionally, the EV to EBIT ratio stands at 16.04, and the PEG ratio is 1.13, suggesting that the stock may not be justifying its current price based on its earnings growth potential.
In terms of peer comparison, Stock Yards Bancorp's valuation metrics are less favorable than those of several competitors, with the likes of Enterprise Financial Services Corp. showing a more attractive valuation at an EV to EBIT of 11.88. The stock has experienced a 1-year return of 22.33%, outperforming the S&P 500's return of 17.14% during the same period, but its 3-year return of 12.92% significantly lags behind the S&P 500's 70.41%. This suggests that while the stock has performed relatively well recently, its valuation does not align with its growth prospects compared to its peers.