Is Good Times Restaurants, Inc. overvalued or undervalued?

As of 19 August 2025, the valuation grade for Good Times Restaurants, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 8, which is notably low compared to its peers, such as Potbelly Corp. with a P/E of 40.09 and Flanigan's Enterprises, Inc. at 17.62. Additionally, the EV to EBITDA ratio stands at 4.48, which, while lower than the industry average, still suggests that the company is not priced attractively relative to its earnings potential.
In terms of performance, Good Times Restaurants has underperformed significantly against the S&P 500, with a year-to-date return of -37.45% compared to the S&P 500's 12.22%. This trend continues over multiple periods, reinforcing the notion that the stock is not only overvalued but also struggling in the market. With a Price to Book Value of 0.63 and a PEG ratio of 2.13, the financial indicators further support the conclusion that Good Times Restaurants, Inc. is not a favorable investment at this time.