Is Xylem, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for Xylem, Inc. has moved from very expensive to expensive, indicating a slight improvement in perceived value. However, the company remains overvalued based on its current metrics. The P/E ratio stands at 35, significantly higher than the industry average, while the EV to EBITDA ratio is 20.21, and the PEG ratio is 1.10, suggesting that the stock is priced for growth that may not materialize.
In comparison to its peers, Xylem, Inc. has a P/E ratio of 37.49, which is higher than Dover Corp.'s fair valuation at 43.35 and significantly lower than Ingersoll Rand, Inc.'s very expensive rating at 52.55. The company's recent performance shows a 30.02% return year-to-date, outperforming the S&P 500's 16.30% in the same period, but it lags behind the S&P 500 over longer horizons, particularly in the 3-year and 5-year returns. Overall, Xylem, Inc. appears to be overvalued in the current market context.