Is Tandy Leather Factory, Inc. overvalued or undervalued?

As of 12 May 2025, Tandy Leather Factory, Inc. has moved from a fair to an attractive valuation grade. The company is currently considered undervalued, with a P/E ratio of 2, a price-to-book value of 0.56, and an EV to EBITDA ratio of 2.33. These metrics suggest that the company is trading at a significant discount compared to its potential earnings and asset value.
In comparison to its peers, Tandy Leather stands out with a much lower P/E ratio than The Honest Co., Inc., which has a P/E of 40.86, and Barnes & Noble Education, Inc., which has a P/E of -72.35. The PEG ratio for Tandy Leather is exceptionally low at 0.01, indicating that growth expectations are not reflected in its current price. Additionally, while Tandy Leather has a ROE of 22.81%, its recent stock performance has lagged behind the S&P 500, particularly over the past year, where it saw a decline of 29.72% compared to the index's gain of 10.26%.