Is Western New England Bancorp, Inc. overvalued or undervalued?

As of 23 July 2025, the valuation grade for Western New England Bancorp, Inc. has moved from fair to expensive, indicating a shift towards overvaluation. The company appears overvalued based on its current metrics, with a P/E ratio of 18, which is higher than the peer average of 18.15 for Hingham Institution for Savings and significantly higher than 9.69 for FS Bancorp, Inc. Additionally, the Price to Book Value stands at 0.81, suggesting that the market is pricing the company above its book value, while the EV to EBITDA ratio of 13.70 further supports the notion of overvaluation compared to peers.
In terms of performance, Western New England Bancorp, Inc. has shown strong returns, with a year-to-date return of 35.87% compared to the S&P 500's 12.22%, and a one-year return of 43.02% versus 17.14% for the index. However, the longer-term performance reveals a concerning trend, as the three-year return of 56.05% lags behind the S&P 500's 70.41%, indicating potential challenges ahead. Overall, the combination of high valuation ratios and mixed performance relative to peers suggests that the stock is currently overvalued.