Is VSE Corp. overvalued or undervalued?

As of 31 January 2025, VSE Corp. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued based on its high P/E ratio of 49, which significantly exceeds the industry average. Additionally, the EV to EBITDA ratio stands at 24.10, further indicating a premium valuation compared to peers. The dividend yield of 17.16% and ROE of 5.76% suggest limited returns relative to the elevated price levels.
In comparison to its peers, VSE Corp.'s P/E ratio is starkly higher than Ameresco, Inc., which has a P/E of 12.79, and IHS Holding Ltd., which is at -33.43. The substantial difference in these ratios highlights VSE Corp.'s overvaluation in the current market environment. While the company has outperformed the S&P 500 with a year-to-date return of 44.71% compared to the index's 2.44%, this performance does not justify its very expensive valuation status.