Is Westinghouse Air Brake Technologies Corp. overvalued or undervalued?

As of 9 April 2025, the valuation grade for Westinghouse Air Brake Technologies Corp. has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently assessed as overvalued, with a P/E ratio of 38, a Price to Book Value of 4.20, and an EV to EBITDA of 21.32, all of which are considerably higher than industry peers. For instance, Caterpillar, Inc. has a P/E of 26.12 and an EV to EBITDA of 20.39, while Deere & Co. shows an even higher P/E of 48.99, further emphasizing the premium at which Westinghouse trades.
Additionally, the company's PEG ratio stands at 1.55, suggesting that despite its growth prospects, the stock may not justify its current price relative to earnings growth. The dividend yield of 37.01% is notably high, which could attract income-focused investors, but it does not mitigate the overall valuation concerns. Over the past year, Westinghouse has outperformed the S&P 500 with a return of 25.56% compared to 10.26%, but this performance does not alter the conclusion that the stock is currently overvalued.