Hawkins (HWKN) stock plunged 11.24% in pre-market trading on Thursday, extending its decline following the release of mixed quarterly earnings results. The sharp drop reflects growing investor concerns about the company's valuation and future growth prospects.

The chemical company reported an increase in revenue compared to the previous year, but experienced a slight dip in net income and earnings per share. This mixed performance has prompted investors to reassess Hawkins' current market position and future potential. The initial market reaction saw the stock fall 4.02% on Wednesday, but the sell-off intensified in pre-market trading as investors digested the implications of the earnings report.

Adding to the downward pressure is Hawkins' elevated price-to-earnings (P/E) ratio of 39.1x, which is significantly higher than the chemical sector average of 26.4x. This premium valuation, coupled with the mixed earnings results, has raised questions about whether the stock's current price accurately reflects its fundamental value. A discounted cash flow (DCF) analysis also suggests that Hawkins might be overvalued, further fueling investor concerns and contributing to the sharp pre-market decline.