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 increase in perceived overvaluation. The company appears to be overvalued based on its current metrics, with a P/E ratio of 36, a Price to Book Value of 3.97, and an EV to EBITDA of 18.45. In comparison, peers such as ITT, Inc. have a P/E of 26.26 and EV to EBITDA of 18.13, while Woodward, Inc. shows a P/E of 42.20 and an EV to EBITDA of 29.34, further emphasizing Zurn Elkay's elevated valuation.
Despite a strong year-to-date return of 22.63% compared to the S&P 500's 13.30%, the company's valuation metrics suggest that it may not sustain this performance given its very expensive rating.