Is STRATTEC Security Corp. overvalued or undervalued?

As of 8 May 2025, the valuation grade for STRATTEC Security Corp. has moved from attractive to fair, indicating a shift in its perceived investment quality. The company appears to be fairly valued based on its current metrics, with a P/E ratio of 19, a Price to Book Value of 2.00, and an EV to EBITDA of 9.45. In comparison to peers, American Axle & Manufacturing Holdings, Inc. has a more attractive P/E of 9.51, while Cooper-Standard Holdings, Inc. shows a P/E of 19.94, suggesting that STRATTEC's valuation is in line with its industry but not particularly compelling.
In terms of performance, STRATTEC has significantly outperformed the S&P 500 over various periods, with a year-to-date return of 74.42% compared to the S&P 500's 12.22%, and a one-year return of 88.21% against 17.14%. This strong performance may support the current valuation, but the recent downgrade in grade suggests caution moving forward.