Is Driven Brands Holdings, Inc. overvalued or undervalued?

As of 25 February 2025, Driven Brands Holdings, Inc. has moved from a fair to a risky valuation grade. The company appears to be overvalued, given its high P/E ratio of 33 compared to peers like Service Corp. International at 21.11 and H&R Block, Inc. at 13.76. Additionally, Driven Brands has a Price to Book Value of 4.69 and an EV to EBITDA ratio of 13.20, which are also elevated relative to its industry peers.
In terms of performance, Driven Brands has struggled recently, with a 3-year return of -47.64% compared to the S&P 500's impressive 70.41% over the same period, indicating significant underperformance. This further supports the conclusion that the stock is overvalued in light of its current financial metrics and market performance.