Is Transcat, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Transcat, Inc. has moved from fair to very expensive, indicating a significant shift in its market perception. The company appears overvalued, particularly when considering its P/E ratio of 47, which is notably higher than its peer, which has a P/E of 54.1. Additionally, Transcat's EV to EBITDA ratio stands at 20.41, while the industry average is not provided, suggesting potential overvaluation relative to peers.
In terms of performance, Transcat's return over the past year has been a stark -46.97%, compared to the S&P 500's positive return of 14.08%, highlighting a considerable underperformance. The company's ROCE is 5.82% and ROE is 5.39%, which further supports the notion of overvaluation as these returns are relatively low. Overall, the combination of high valuation ratios and poor stock performance relative to the benchmark suggests that Transcat, Inc. is overvalued in the current market environment.