Is Macy's, Inc. overvalued or undervalued?

As of 28 May 2025, Macy's, Inc. has moved from an expensive valuation to a very attractive one. The company is currently undervalued, with a P/E ratio of 5, significantly lower than its peers, such as Kohl's Corp. with a P/E of 13.87 and Wayfair, Inc. which is in a risky position with a negative P/E. Additionally, Macy's boasts a price-to-book value of 0.81 and an EV to EBITDA ratio of 3.10, indicating strong value relative to its earnings potential.
The company's high dividend yield of 393.21% and solid ROE of 16.14% further support the undervaluation thesis. Despite recent stock performance lagging behind the S&P 500, with a year-to-date decline of 37.15% compared to the index's 2.44% gain, the current valuation metrics suggest that Macy's presents a compelling investment opportunity.