Is The Simply Good Foods Co. overvalued or undervalued?

As of 9 April 2025, the valuation grade for The Simply Good Foods Co. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued based on its financial metrics. The P/E ratio stands at 21, which is notably higher than its peer average of approximately 20.45. Additionally, the EV to EBITDA ratio is 13.39, again above the peer average of 13.241, and the PEG ratio is 1.51, suggesting that the stock is priced high relative to its growth prospects.
In comparison to its peers, The Simply Good Foods Co. shows weaker returns, with a ROCE of 11.81% and ROE of 8.92%, which are not compelling enough to justify its high valuation. The company's stock has underperformed against the S&P 500, with a year-to-date return of -16.37% compared to the index's 2.44%. Overall, these factors contribute to the conclusion that The Simply Good Foods Co. is overvalued in the current market environment.