Is Twin Disc, Inc. overvalued or undervalued?

As of 7 May 2025, Twin Disc, Inc. has moved from a fair to a very expensive valuation grade. The company is currently considered overvalued. Key ratios include a P/E ratio of 25, an EV to EBIT of 14.70, and a Price to Book Value of 0.75. In comparison to peers, Twin Disc's P/E ratio of 26.31 is significantly higher than Greenbrier Cos., Inc. at 6.73 and Astec Industries, Inc. at 12.07, indicating a premium valuation relative to its competitors.
Despite a recent stock return of 12.75% over the past week, which outperformed the S&P 500's slight decline, the overall year-to-date performance shows a decline of 26.98%, suggesting that the market may be reacting to the company's overvaluation. With a ROCE of 5.37% and an ROE of 3.01%, the financial performance does not justify the current high valuation, reinforcing the conclusion that Twin Disc, Inc. is overvalued.