Is Transcat, Inc. overvalued or undervalued?

As of 28 March 2025, the valuation grade for Transcat, Inc. has moved from expensive to very expensive. The company is currently overvalued, with a P/E ratio of 47, a Price to Book Value of 2.53, and an EV to EBITDA of 40.63. In comparison, PAR Technology Corp. is categorized as risky with a P/E ratio of -34.42, highlighting the stark contrast in valuation metrics within the sector.
Transcat's PEG ratio stands at 21.67, indicating a high growth expectation relative to its earnings, which is not supported by its ROCE of 5.82% and ROE of 5.39%. The stock has underperformed against the S&P 500 over various time frames, notably with a year-to-date return of -24.09% compared to the index's 2.44%, reinforcing the notion that the stock is overvalued at its current price of 80.27.