Is Zurn Elkay Water Solutions Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Zurn Elkay Water Solutions Corp. moved from expensive to very expensive, indicating a significant shift in its valuation outlook. The company is currently overvalued, as reflected by its P/E ratio of 36, which is substantially higher than peers like ITT, Inc. with a P/E of 26.26 and Regal Rexnord Corp. at 32.78. Additionally, Zurn Elkay's EV to EBITDA ratio stands at 18.45, compared to the industry average of around 12.72 for Chart Industries, Inc., further emphasizing its premium valuation.
In terms of performance, Zurn Elkay has delivered a year-to-date return of 22.63%, outperforming the S&P 500's 13.30% during the same period, which suggests some investor confidence despite its high valuation metrics. However, the company's PEG ratio of 1.05 indicates that its growth expectations may not justify its current price, especially when compared to peers like Woodward, Inc. with a PEG of 3.10. Overall, Zurn Elkay Water Solutions Corp. appears to be overvalued in the current market environment.