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. The company appears to be overvalued, particularly when considering its negative P/E ratio of -102.13, a Price to Book Value of 0.91, and an EV to EBITDA of 7.96. In comparison, peers such as Gap, Inc. have a more favorable P/E of 10.22 and Urban Outfitters, Inc. boasts a P/E of 13.77, indicating that Foot Locker's valuation metrics are significantly weaker than those of its competitors.
Additionally, Foot Locker's recent stock performance has been disappointing, with a 1-year return of -12.47% compared to the S&P 500's 17.14%, and a staggering 5-year return of -25.60% against the S&P 500's 96.61%. These figures reinforce the notion that Foot Locker is struggling relative to broader market trends, further supporting the conclusion that the company is currently overvalued.