Is Tetra Tech, Inc. overvalued or undervalued?

As of 7 May 2025, Tetra Tech, Inc. has moved from an expensive to a very expensive valuation grade. The company is currently considered overvalued. Key ratios include a P/E ratio of 43, a Price to Book Value of 5.96, and an EV to EBITDA of 16.69. In comparison, peers such as EMCOR Group, Inc. have a P/E of 23.87, and AECOM shows a P/E of 20.44, indicating that Tetra Tech's valuation significantly exceeds that of its competitors.
Despite a dividend yield of 3.40% and a strong ROCE of 22.20%, the high valuation metrics suggest that the stock is priced well above its intrinsic value. Additionally, Tetra Tech's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -11.17% compared to the index's 2.44%, further reinforcing the notion that the stock may be overvalued.