Is Tootsie Roll Industries, Inc. overvalued or undervalued?

As of 8 September 2025, Tootsie Roll Industries, Inc. has moved from a fair to an expensive valuation grade. The company appears to be overvalued based on its current metrics, with a P/E ratio of 35, a Price to Book Value of 3.42, and an EV to EBITDA of 24.81. In comparison to its peers, Tootsie Roll's P/E ratio is significantly higher than Lancaster Colony Corp. at 27.91, which is rated fair, and Balchem Corp. at 36.79, which is also considered expensive.
Despite the overvaluation, Tootsie Roll has shown strong performance relative to the S&P 500, with a year-to-date return of 30.53% compared to the index's 12.22%. However, over a three-year period, the company has underperformed the S&P 500, with a return of 31.71% versus 70.41% for the index, highlighting concerns about its long-term growth potential.