Is Texas Community Bancshares, Inc. overvalued or undervalued?

As of 3 October 2025, the valuation grade for Texas Community Bancshares, Inc. has moved from attractive to very attractive, indicating a strong improvement in its valuation outlook. The company appears to be undervalued, particularly when considering its P/E ratio of 24, which is higher than peers like Magyar Bancorp, Inc. at 11.61 and Lake Shore Bancorp, Inc. at 21.02. Additionally, the Price to Book Value stands at 0.92, and the PEG Ratio is notably low at 0.13, suggesting that the stock is trading at a discount relative to its growth potential.
In terms of peer comparison, Texas Community Bancshares, Inc. has a higher P/E ratio than its peers, which may indicate that the market is pricing in future growth. The company’s recent stock performance shows a YTD return of 5.81%, significantly trailing the S&P 500's return of 14.18%, and over the past year, it has returned 8.57% compared to the S&P 500's 17.82%. This underperformance relative to the benchmark reinforces the notion that the stock may be undervalued, as it has not yet captured its full potential in the market.