Is Monro, Inc. overvalued or undervalued?

As of 28 May 2025, the valuation grade for Monro, Inc. has moved from expensive to risky, indicating a shift in perception regarding its market position. Based on the analysis of key ratios, Monro appears to be overvalued. The P/E ratio stands at 27, significantly higher than its peers such as The ODP Corp. with a P/E of 14.06, while the EV to EBITDA ratio is 6.50, which is also above the industry average. Additionally, the Price to Book Value is at 0.95, suggesting that the stock is trading close to its book value but still reflects overvaluation when considering its low return metrics.
In comparison to its peers, Monro's return on equity (ROE) is only 3.46%, while The ODP Corp. offers a more favorable valuation profile. Notably, Monro's stock has underperformed significantly against the S&P 500, with a year-to-date return of -26.37% compared to the S&P 500's 12.22%. This stark contrast in performance further reinforces the notion that Monro, Inc. is currently overvalued.