Is Xylem, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Xylem, Inc. has moved from fair to expensive, indicating that the company is overvalued. Key ratios supporting this assessment include a P/E ratio of 35, an EV to EBITDA of 20.21, and a Price to Book Value of 3.03. In comparison, peers such as Ingersoll Rand, Inc. have a higher P/E of 52.55, while Dover Corp. presents a more attractive P/E of 43.35, highlighting Xylem's relatively high valuation within its industry.
Despite a strong year-to-date return of 25.76%, which outperformed the S&P 500's 13.30%, the long-term performance shows a decline, with a 3-year return of 61.14% compared to the S&P 500's 81.19%. This suggests that while Xylem has performed well recently, its current valuation may not be justified given the overall market performance and peer comparisons.