Is Portillo's, Inc. overvalued or undervalued?

As of 6 May 2025, the valuation grade for Portillo's, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios include a P/E ratio of 26, an EV to EBIT of 18.01, and an EV to EBITDA of 12.70, which are notably higher than its peers. For instance, Cracker Barrel Old Country Store, Inc. has a P/E ratio of 21.87 and an EV to EBITDA of 9.28, while First Watch Restaurant Group, Inc. shows a P/E of 54.78, further emphasizing the high valuation of Portillo's.
In comparison to the broader market, Portillo's has underperformed in the short term, with a 1-week return of -5.99% compared to a slight decline in the S&P 500 of -0.13%. Despite a year-to-date return of 20.21%, the overall valuation metrics suggest that the stock is not justified at its current price of $11.30, especially when considering its recent performance against the S&P 500.