Is Caleres, Inc. overvalued or undervalued?

As of 5 December 2024, the valuation grade for Caleres, Inc. has moved from very attractive to attractive, indicating a shift in market perception. The company appears to be undervalued, given its low P/E ratio of 5 compared to the industry average, and an impressive dividend yield of 109.92%. Additionally, the EV to EBITDA ratio stands at 4.34, further supporting the undervaluation thesis.
In comparison to its peer Winmark Corp., which has a significantly higher P/E ratio of 38.17 and an EV to EBITDA of 28.99, Caleres, Inc. presents a more compelling investment opportunity. The company's ROE of 14.37% and ROCE of 13.49% also reflect solid operational efficiency. Despite recent stock performance lagging behind the S&P 500, with a year-to-date return of -45.81% versus the S&P's 2.44%, these valuation metrics suggest that Caleres, Inc. is positioned favorably for potential recovery.