Is Zurn Elkay Water Solutions Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Zurn Elkay Water Solutions Corp. has moved from expensive to very expensive, indicating a significant concern regarding its current market valuation. The company appears to be overvalued based on its P/E ratio of 36, which is substantially higher than the industry average, and its EV to EBITDA ratio of 24.61, which also exceeds the peer average. Additionally, the PEG ratio stands at 1.05, suggesting that the stock may not be adequately priced relative to its growth expectations.
In comparison to its peers, Zurn Elkay's P/E ratio is notably higher than that of ITT, Inc. (26.26) and Regal Rexnord Corp. (32.78), both of which are considered fairly valued. The recent stock performance shows that Zurn Elkay has outperformed the S&P 500 year-to-date with a return of 22.63% compared to 13.30%, but it underperformed over the last week and month. Overall, the company's high valuation ratios and the recent grade change suggest that Zurn Elkay Water Solutions Corp. is overvalued.