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. Despite this change, the company appears to be overvalued based on its current metrics. Key ratios include a P/E ratio of 35, an EV to EBITDA of 20.21, and a Price to Book Value of 3.03, all of which suggest that the stock is trading at a premium compared to its peers.
In comparison, Ingersoll Rand, Inc. has a higher P/E ratio of 52.55, while Dover Corp. is more fairly valued with a P/E of 43.35. This places Xylem in a relatively expensive position within its industry. Additionally, while Xylem has shown strong returns, with a year-to-date return of 30.02% compared to the S&P 500's 16.30%, its three-year return of 47.27% lags behind the S&P 500's 76.66%. This performance suggests that, despite recent gains, the stock's valuation may not be justified in the long term.