Is Tempur Sealy International, Inc. overvalued or undervalued?

As of 8 May 2025, the valuation grade for Tempur Sealy International, Inc. has moved from very attractive to fair. The company appears to be overvalued based on its current metrics. The P/E ratio stands at 40, significantly higher than the industry average, while the Price to Book Value is 7.15, indicating a premium valuation. Additionally, the EV to EBITDA ratio is 27.67, further suggesting that the stock may be priced beyond its intrinsic value.
In comparison to peers, Tempur Sealy's P/E ratio of 39.18 is slightly lower than its own but still elevated compared to the industry standard. Notable peers include a company with a P/E of 30, which highlights the relative overvaluation of Tempur Sealy. The company's recent performance has been strong, with a 1-year return of 36.10%, outperforming the S&P 500's 10.26% return, but this does not mitigate the concerns regarding its current valuation levels.