Is West Bancorporation, Inc. overvalued or undervalued?

As of 20 June 2025, the valuation grade for West Bancorporation, Inc. has moved from very expensive to expensive. The company appears to be overvalued based on its current financial ratios. The P/E ratio stands at 12, while the industry average P/E is slightly higher at approximately 12.42, indicating that West Bancorporation is trading at a lower valuation compared to its peers. Additionally, the EV to EBITDA ratio is 15.57, which is also on the higher side relative to its peers like Macatawa Bank Corp. at 12.42 and Peoples Financial Services Corp. at 13.04. In terms of performance metrics, West Bancorporation has a ROE of 10.97% and a ROCE of 6.76%, suggesting moderate returns on equity and capital employed. Comparatively, Sierra Bancorp, which is rated attractive, has a significantly lower P/E ratio of 9.27, indicating it may offer better value. Despite a recent stock return of 15.16% over the past year, which outperformed the S&P 500's 10.26%, the overall valuation suggests that West Bancorporation is overvalued in the current market context.