Is Signet Jewelers Ltd. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Signet Jewelers Ltd. has moved from attractive to expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on its current P/E ratio of 12, which is below the peer average of approximately 14.61 for Signet, and the EV to EBITDA ratio of 6.81, which is also less favorable compared to peers like Dick's Sporting Goods, which has an EV to EBITDA of 18.35. Additionally, the Price to Book Value stands at 2.56, suggesting that the market is pricing the stock at a premium relative to its book value.
In comparison to its peers, Signet's valuation metrics indicate that it is less attractive, particularly when compared to Lithia Motors, which has a P/E of 9.59 and an EV to EBITDA of 10.97. The recent stock performance shows that Signet has outperformed the S&P 500 in the year-to-date period with a return of 27.91% compared to the S&P 500's 13.30%, but over longer periods, such as 3 years and 5 years, its returns lag behind the index. Overall, the valuation metrics and peer comparisons suggest that Signet Jewelers Ltd. is overvalued at its current price.