Is Ethan Allen Interiors, Inc. overvalued or undervalued?

As of 21 February 2025, the valuation grade for Ethan Allen Interiors, Inc. moved from expensive to very attractive, indicating a significant shift in its perceived value. The company appears undervalued based on its current metrics, with a P/E ratio of 22, an EV to EBITDA of 13.80, and a Price to Book Value of 2.70. In comparison, Arhaus, Inc. has a P/E of 22.58, while The Lovesac Co. stands at 20.70, suggesting that Ethan Allen may offer a more favorable valuation relative to its peers.
Despite the attractive valuation, Ethan Allen's recent stock performance has lagged behind the S&P 500, with a 1-year return of -7.25% compared to the index's 17.14%. However, over a 5-year period, the company has shown a return of 95.73%, closely matching the S&P 500's 96.61%, indicating potential for recovery and growth.