Is El Pollo Loco Holdings, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for El Pollo Loco Holdings, Inc. moved from expensive to very expensive. The company is considered overvalued based on its current financial metrics. Key ratios include a P/E ratio of 13, an EV to EBITDA of 7.44, and a Price to Book Value of 1.25, which suggest that the stock is trading at a premium compared to its earnings and assets.
In comparison to peers, El Pollo Loco's P/E ratio of 13 is lower than BJ's Restaurants, Inc. at 26.98 and Chuy's Holdings, Inc. at 19.29, but still reflects a very expensive valuation overall. Additionally, Carrols Restaurant Group, Inc. is rated fair with a P/E of 15.07, indicating that El Pollo Loco may not be justified in its current valuation. Over the past year, El Pollo Loco has underperformed significantly, with a stock return of -31.34% compared to the S&P 500's return of 14.08%, reinforcing the notion that the stock is overvalued.