Is Foot Locker, Inc. overvalued or undervalued?

As of 29 May 2025, Foot Locker, Inc. has moved from a fair to a risky valuation grade, indicating a significant deterioration in its financial outlook. The company appears to be overvalued given its current metrics, with a Price to Book Value of 0.91 and an EV to EBITDA ratio of 7.96, which are not favorable compared to its peers. Notably, Foot Locker's P/E ratio is NA due to its loss-making status, while its ROE stands at -0.16%, reflecting poor profitability.
In comparison to its peers, Urban Outfitters, Inc. has a P/E of 13.88 and an EV to EBITDA of 9.18, while Boot Barn Holdings, Inc. shows a P/E of 27.50 and an EV to EBITDA of 16.49, both indicating stronger valuations. The stark contrast in these ratios suggests that Foot Locker is not only underperforming but also mispriced relative to its competitors. Furthermore, the company's recent stock performance has lagged behind the S&P 500, with a 1-year return of -5.47% compared to the index's 10.26%, reinforcing the notion that Foot Locker is overvalued in the current market context.