Is Kontoor Brands, Inc. overvalued or undervalued?

As of 22 May 2025, the valuation grade for Kontoor Brands, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued based on its financial metrics. Key ratios include a P/E ratio of 15, an EV to EBITDA of 10.87, and a PEG ratio of 2.36, which suggest that the stock is priced higher than its earnings growth potential would justify.
In comparison to its peers, Kontoor Brands has a P/E ratio of 14.14, while Columbia Sportswear Co. is at 14.87, and Ermenegildo Zegna NV is significantly higher at 32.50. This indicates that while Kontoor's valuation is high, it is still somewhat competitive within its peer group. However, the elevated PEG ratio and the recent performance, where the stock has underperformed against the S&P 500 year-to-date, further reinforce the conclusion that Kontoor Brands is overvalued in the current market environment.