Is Potbelly Corp. overvalued or undervalued?

As of 11 August 2025, Potbelly Corp. has moved from an expensive to a very expensive valuation grade. The company is considered overvalued, particularly given its high P/E ratio of 40.09, which significantly exceeds the industry average, and an EV to EBITDA ratio of 19.35. Additionally, its PEG ratio is notably low at 0.01, indicating that despite high growth expectations, the stock price may not be justified.
In comparison to its peers, BJ's Restaurants, Inc. has a P/E ratio of 26.98, while Chuy's Holdings, Inc. stands at 19.29, both suggesting that Potbelly Corp. is trading at a premium relative to similar companies in the leisure services sector. Despite this overvaluation, Potbelly has outperformed the S&P 500 with a year-to-date return of 80.57% compared to the index's 12.22%, highlighting a strong short-term performance that may not be sustainable given its current valuation metrics.