Is Skechers U.S.A., Inc. overvalued or undervalued?

As of 18 June 2025, the valuation grade for Skechers U.S.A., Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently deemed overvalued based on its financial ratios. The P/E ratio stands at 13, while the industry average is considerably higher, with peers like On Holding AG showing a P/E of 74.98 and Ralph Lauren Corp. at 45.59. Additionally, Skechers' EV to EBITDA ratio is 8.33, which is less favorable compared to Crocs, Inc. at 10.58, highlighting a disparity in valuation among competitors.
Skechers' PEG ratio of 3.62 further underscores its overvaluation, especially when compared to Crocs, which boasts a much lower PEG ratio of 0.37. The company's ROCE is at 20.22% and ROE at 15.83%, which are respectable but do not justify the current high valuation in light of the competitive landscape. Recent stock performance shows that Skechers has underperformed against the S&P 500 over the past year, with a return of -13.70% compared to the index's 10.26%, reinforcing the notion that the stock may be overvalued at its current price of $62.67.