Is The Kroger Co. overvalued or undervalued?

As of 20 June 2025, the valuation grade for The Kroger Co. has moved from very expensive to expensive, indicating a slight improvement in perceived value. However, based on the current metrics, the company appears to be overvalued. The P/E ratio stands at 37, significantly higher than the industry average, while the EV to EBITDA ratio is 15.73, again above the peer average of 15.69 for comparable companies like Walmart, which has a P/E of 25.34.
In addition to the high P/E ratio, Kroger's Price to Book Value is 14.74, and its ROE is notably high at 39.34%, suggesting strong profitability but also reflecting the premium investors are willing to pay. Despite a solid performance with a 1-year return of 47.38% compared to the S&P 500's 10.26%, the current valuation metrics indicate that The Kroger Co. is not a bargain at its current price of $74.00.