Is The Wendy's Co. overvalued or undervalued?

As of 16 January 2025, The Wendy's Co. has moved from a fair to a very attractive valuation grade. The company appears to be undervalued, particularly when considering its P/E ratio of 26, which is significantly higher than the peer average of 21.98, and an EV to EBITDA ratio of 14.16, also above the peer benchmark. Additionally, the company's impressive ROE of 155.01% suggests strong profitability relative to equity.
In comparison to its peers, Texas Roadhouse, Inc. has a P/E of 24.79, while Aramark stands at 31.90, indicating that The Wendy's Co. is trading at a lower valuation despite its strong performance metrics. Notably, the stock has underperformed against the S&P 500 across multiple periods, with a year-to-date return of -41.60% compared to the S&P 500's 12.22%, highlighting a potential mispricing in the market.