Is Brinker International, Inc. overvalued or undervalued?

As of 28 May 2025, Brinker International, Inc. has moved from a fair to an expensive valuation grade. The company is currently overvalued, with a P/E ratio of 31, a price-to-book value of 45.96, and an EV to EBITDA ratio of 18.07. In comparison to peers, Shake Shack, Inc. has a significantly higher P/E ratio of 407.22, while Papa John's International, Inc. presents a more attractive P/E of 23.74, highlighting the disparity in valuation within the industry.
Despite Brinker’s impressive ROE of 147.98% and ROCE of 60.56%, these figures do not justify its current market price, especially when juxtaposed against peers like Bloomin' Brands, Inc., which is considered very attractive with a P/E of 5.53. Notably, Brinker has outperformed the S&P 500 with a 1-year return of 150.72% compared to the index's 10.26%, yet this strong performance does not mitigate the concerns surrounding its elevated valuation metrics.