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, indicating a significant shift in its perceived value. The company is overvalued, as evidenced by its P/E ratio of 13, which is lower than the peer average of approximately 12.44, and an EV to EBITDA ratio of 7.44, which is higher than the peer average of 6.81. Additionally, the Price to Book Value stands at 1.25, suggesting that the stock is priced above its book value compared to its peers.
In comparison to its peers, BJ's Restaurants, Inc. has a P/E of 26.98, and Chuy's Holdings, Inc. has a P/E of 19.29, both indicating higher valuations. The recent performance of El Pollo Loco has been poor, with a year-to-date return of -18.54%, significantly underperforming the S&P 500's return of 13.30% in the same period, reinforcing the notion that the stock is overvalued.