Is UniFirst Corp. overvalued or undervalued?

As of 8 January 2025, the valuation grade for UniFirst Corp. has moved from attractive to fair, indicating a shift in its perceived value. The company appears to be fairly valued based on its current metrics, with a P/E ratio of 22, a Price to Book Value of 1.57, and an EV to EBITDA of 9.48. In comparison, Service Corp. International has a P/E of 21.11 and an EV to EBITDA of 12.77, while Valvoline, Inc. shows a P/E of 18.23 and an EV to EBITDA of 14.14, suggesting that UniFirst is positioned competitively within its peer group.
Despite this fair valuation, UniFirst has underperformed relative to the S&P 500, with a one-year return of -9.44% compared to the index's 17.14%. This trend of underperformance is further highlighted over longer periods, with a five-year return of -8.71% against the S&P's 96.61%. Overall, while UniFirst is fairly valued, its recent stock performance raises concerns about its growth prospects relative to broader market trends.