Is The Wendy's Co. overvalued or undervalued?

As of 15 January 2025, The Wendy's Co. has moved from a valuation grade of very expensive to very attractive. This indicates a significant shift in its perceived value, suggesting that the company is currently undervalued. The key ratios reflect this change, with a P/E ratio of 26, an EV to EBITDA of 14.16, and a ROE of 155.01%, which is notably high compared to industry standards.
In comparison to its peers, The Wendy's Co. has a lower P/E ratio than Darden Restaurants, Inc. at 24.86 and Domino's Pizza, Inc. at 28.24, indicating that it may be undervalued relative to these competitors. Additionally, while the industry average P/E is not explicitly provided, the current valuation metrics suggest a favorable position for The Wendy's Co. in the market. Despite recent stock performance trailing behind the S&P 500 over the long term, the current valuation metrics and peer comparisons support the conclusion that The Wendy's Co. is undervalued.