Is The Eastern Co. overvalued or undervalued?

As of 20 August 2025, The Eastern Co. has moved from expensive to very expensive, indicating a significant shift in its valuation grade. The company is overvalued, as evidenced by its P/E ratio of 18, which is notably higher than peers like Luxfer Holdings Plc with a P/E of 11.61 and NL Industries, Inc. at 4.86. Additionally, the EV to EBITDA ratio stands at 8.16, while EVI Industries, Inc. shows a much higher ratio of 15.15, further highlighting the relative overvaluation of The Eastern Co.
The stock has underperformed compared to the S&P 500 over the longer term, with a 1-year return of -13.65% versus the S&P 500's 17.14%. This trend continues over the 3-year and 5-year periods, where The Eastern Co. returned 42.39% and 29.26%, respectively, compared to 70.41% and 96.61% for the S&P 500. Overall, the combination of high valuation ratios and underwhelming stock performance suggests that The Eastern Co. is not a compelling investment at its current price.