Is Watts Water Technologies, Inc. overvalued or undervalued?

As of 7 May 2025, the valuation grade for Watts Water Technologies, Inc. has moved from very attractive to fair. The company is currently fairly valued based on its financial metrics. The P/E ratio stands at 26, while the EV to EBITDA ratio is 17.47, and the PEG ratio is 1.98, indicating moderate growth expectations relative to its valuation.
In comparison to its peers, Watts Water Technologies, Inc. has a P/E ratio of 25.75, which is lower than Woodward, Inc. at 42.64, but higher than ITT, Inc. at 22.89. The company's return on capital employed (ROCE) is a strong 24.78%, suggesting efficient use of capital. Notably, the stock has outperformed the S&P 500 over various time frames, including a 32.03% return over the past year compared to the S&P 500's 10.26%, reinforcing its current valuation stance.