Is Aramark overvalued or undervalued?

As of 6 February 2024, Aramark's valuation grade has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued. Key ratios highlight this assessment, with a P/E ratio of 34, a Price to Book Value of 3.99, and an EV to EBITDA ratio of 14.38, all of which are elevated compared to industry standards.
When compared to peers, Aramark's P/E ratio stands at 33.88, notably higher than Darden Restaurants, Inc. at 24.86 and Yum China Holdings, Inc. at 17.01, both of which are categorized as very expensive and expensive, respectively. Additionally, Aramark's return over the past year has outperformed the S&P 500, with a 19.20% increase compared to the index's 10.26%, yet this performance does not justify its current valuation levels.