Is Good Times Restaurants, Inc. overvalued or undervalued?

As of 8 May 2025, the valuation grade for Good Times Restaurants, Inc. has moved from fair to expensive, indicating a shift in its perceived value. The company is currently considered overvalued. Key financial ratios include a P/E ratio of 8, an EV to EBITDA of 4.48, and a PEG ratio of 2.13, which suggests that the stock is not priced attractively relative to its earnings growth potential.
In comparison to its peers, Good Times Restaurants, Inc. has a lower P/E ratio than Potbelly Corp., which stands at 9.45, and a similar EV to EBITDA ratio compared to The ONE Group Hospitality, Inc. at 4.62. Despite a recent uptick in stock performance, with a 1-week return of 4.14% against a slight decline in the S&P 500, the overall trend shows a significant underperformance over the longer term, with a year-to-date decline of 32.05% compared to a modest gain of 2.44% for the index. This further supports the conclusion that the company is currently overvalued.