Is XPEL, Inc. overvalued or undervalued?

As of 7 May 2025, the valuation grade for XPEL, Inc. has moved from fair to expensive, indicating that the company is currently overvalued. The P/E ratio stands at 22, which is higher than the industry average, while the EV to EBITDA ratio is 13.75, further supporting this assessment. Additionally, the ROCE is a strong 28.10%, and the ROE is 20.14%, but these figures do not offset the high valuation multiples.
When compared to peers, XPEL, Inc. has a P/E of 21.19, which is significantly higher than Standard Motor Products, Inc.'s P/E of 11.03, suggesting that XPEL is trading at a premium despite its strong returns. The EV to EBITDA ratio for XPEL is also higher than that of its peer, which stands at 7.39. Overall, XPEL, Inc. appears to be overvalued in the current market context, especially considering its recent stock performance, which has lagged behind the S&P 500 over various timeframes.