Is UFP Technologies, Inc. overvalued or undervalued?

As of 27 August 2025, the valuation grade for UFP Technologies, Inc. moved from fair to attractive, indicating a positive shift in its perceived value. The company appears to be undervalued, supported by a P/E ratio of 28, which is lower than the peer average of approximately 22.93, and a PEG ratio of 0.78, suggesting that the stock may be undervalued relative to its growth potential. Additionally, the EV to EBITDA ratio stands at 18.60, which is competitive compared to peers like Axalta Coating Systems Ltd. at 9.89 and CSW Industrials, Inc. at 20.45.
Despite recent struggles, with a one-year return of -40.35% compared to the S&P 500's 17.14%, UFP Technologies has shown resilience over longer periods, achieving a three-year return of 122.81% against the S&P's 70.41%. This performance, combined with strong ROCE and ROE figures of 17.19% and 18.39%, respectively, reinforces the notion that the company is positioned well for future growth, further supporting the conclusion that it is undervalued.