Is Tandy Leather Factory, Inc. overvalued or undervalued?

As of 11 August 2025, the valuation grade for Tandy Leather Factory, Inc. moved from attractive to very attractive. The company appears to be undervalued, with a P/E ratio of 2, a Price to Book Value of 0.56, and an EV to EBITDA of 2.33, significantly lower than its peers. In comparison, The Honest Co., Inc. has a P/E of 23.51, indicating a much higher valuation, while Barnes & Noble Education, Inc. shows a risky valuation with a P/E of -55.16.
Despite Tandy Leather's recent stock performance lagging behind the S&P 500, with a year-to-date return of -35.28% compared to the S&P 500's 12.22%, the company's low valuation ratios suggest that it may offer significant upside potential. The combination of a low PEG ratio of 0.01 and a high ROE of 22.81% further supports the notion that Tandy Leather is undervalued in the current market.