Is Flexsteel Industries, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Flexsteel Industries, Inc. has moved from fair to expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on its P/E ratio of 7, which is significantly lower than the peer average of 9.47 for comparable companies, such as Ethan Allen Interiors, Inc. with a P/E of 28.41 and Bassett Furniture Industries, Inc. at 35.27. Additionally, Flexsteel's EV to EBITDA ratio stands at 6.29, while its peers average around 8.36, further supporting the notion of overvaluation.
The company's PEG ratio of 0.12 suggests that its growth prospects are not being adequately reflected in its current price, reinforcing the assessment of overvaluation. Flexsteel's recent stock performance has also been underwhelming, with a year-to-date return of -29.21%, compared to the S&P 500's gain of 13.30%, highlighting a significant underperformance relative to the broader market. Overall, these factors suggest that Flexsteel Industries, Inc. is currently overvalued.