Is VSE Corp. overvalued or undervalued?

As of 30 June 2025, VSE Corp. has moved from an expensive to a very expensive valuation grade. The company appears to be overvalued, particularly when considering its P/E ratio of 49, which is significantly higher than peers like IES Holdings, Inc. with a P/E of 27.82 and Primoris Services Corp. at 25.49. Additionally, VSE Corp.'s EV to EBITDA stands at 24.10, compared to IES Holdings' 18.65, further indicating a premium valuation relative to its industry peers.
The dividend yield of 17.16% and ROE of 5.76% are noteworthy, but they do not sufficiently justify the high valuation metrics. VSE Corp. has outperformed the S&P 500 with a year-to-date return of 81.56% compared to the index's 12.22%, which may attract investor interest despite the overvaluation. Overall, the combination of high valuation ratios and peer comparisons suggests that VSE Corp. is not a compelling investment at its current price.