Is BJ's Restaurants, Inc. overvalued or undervalued?

As of 20 February 2025, the valuation grade for BJ's Restaurants, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued, with a P/E ratio of 43, a Price to Book Value of 2.63, and an EV to EBITDA of 9.48. These ratios suggest that the stock is trading at a premium compared to its earnings and book value, which raises concerns about its sustainability at these levels.
In comparison to its peers, BJ's Restaurants, Inc. has a higher P/E ratio than First Watch Restaurant Group, Inc., which stands at 54.78, and a lower EV to EBITDA ratio than Sweetgreen, Inc., which is currently at -74.68. This peer comparison highlights that while BJ's is priced higher than some competitors, it is still considered very expensive relative to the industry. Notably, the company's stock has outperformed the S&P 500 year-to-date, returning 26.40% compared to the index's 2.44%, but this performance does not mitigate the concerns about its current valuation.