Is Grocery Outlet Holding Corp. overvalued or undervalued?

As of 5 August 2025, the valuation grade for Grocery Outlet Holding Corp. has moved from very expensive to fair. Based on the current metrics, the company appears to be fairly valued. The P/E ratio stands at 24, while the Price to Book Value is 1.14, and the EV to EBITDA is 8.83, indicating a reasonable valuation relative to its earnings and asset base.
In comparison to peers, Grocery Outlet's P/E ratio is lower than Sprouts Farmers Market, which has a P/E of 27.62, but higher than Albertsons, which has a P/E of 9.39. Additionally, the EV to EBITDA ratio of Grocery Outlet is more favorable than that of Sprouts Farmers Market at 14.50. Despite the fair valuation, the stock has underperformed relative to the S&P 500, with a 1-year return of 3.04% compared to the index's 17.14%, and a significant decline over the past three and five years, suggesting potential concerns about growth.