Is Willdan Group, Inc. overvalued or undervalued?

As of 13 May 2025, the valuation grade for Willdan Group, Inc. has moved from fair to expensive, indicating that the company is currently overvalued. The P/E ratio stands at 34, significantly higher than peers such as Universal Technical Institute, Inc. with a P/E of 31.55 and Emerald Holding, Inc. at 41.37. Additionally, the EV to EBITDA ratio for Willdan is 18.14, which is also elevated compared to its industry peers.
In terms of key financial metrics, Willdan's ROCE is 10.97% and ROE is 9.90%, which do not sufficiently justify its high valuation. The PEG ratio of 0.42 suggests that the stock may be undervalued in terms of growth, but the overall high valuation metrics point towards an overvaluation status. Despite a strong performance relative to the S&P 500, with a 1-year return of 106.61% compared to 10.26% for the index, the current valuation does not align with the financial fundamentals, reinforcing the conclusion that Willdan Group, Inc. is overvalued.