Is BJ's Wholesale Club Holdings, Inc. overvalued or undervalued?

As of 22 August 2025, the valuation grade for BJ's Wholesale Club Holdings, Inc. moved from very attractive to attractive. The company appears to be overvalued based on its current valuation ratios, including a P/E ratio of 27, a Price to Book Value of 7.96, and an EV to EBITDA of 14.59. In comparison, peers such as Penske Automotive Group, Inc. have a P/E of 12.91, and CarMax, Inc. has an EV to EBITDA of 116.16, indicating that BJ's is trading at a premium relative to its industry.
Despite a strong return of 21.97% over the past year compared to the S&P 500's 17.14%, the company's multi-year performance shows a stark contrast, with a 3-year return of 24.68% versus the S&P 500's 70.41%. This suggests that while BJ's has performed well recently, it may not justify its current valuation levels when compared to its peers and the broader market trends.