Is Crown Crafts, Inc. overvalued or undervalued?

As of 25 June 2025, the valuation grade for Crown Crafts, Inc. has moved from very attractive to risky, indicating a shift in the company's perceived value. Based on the current metrics, the company appears to be overvalued. The P/E ratio stands at 17, while the Price to Book Value is notably low at 0.81, and the EV to EBITDA ratio is 6.12, which suggests that the market may not be pricing in the company's risks adequately.
In comparison to its peers, Crown Crafts, Inc. has a lower P/E ratio than Ethan Allen Interiors, Inc. at 28.41 and Arhaus, Inc. at 22.58, which are both considered attractive. Additionally, the company's return performance has been significantly lagging, with a year-to-date return of -35.41% compared to the S&P 500's 12.22%, and a three-year return of -52.15% versus 70.41% for the index. This stark contrast in returns further reinforces the notion that Crown Crafts, Inc. is currently overvalued.