Is Winmark Corp. overvalued or undervalued?

As of 14 April 2020, Winmark Corp. has moved from an attractive to a risky valuation grade. The company appears to be overvalued given its high P/E ratio of 37, a PEG ratio of 34.52, and an EV to EBITDA of 28.25, which significantly exceeds the industry averages. In comparison, Gap, Inc. has a P/E of 10.22 and Urban Outfitters, Inc. has a P/E of 13.77, indicating that Winmark's valuation metrics are not aligned with its peers. Despite the overvaluation, Winmark has shown strong stock performance, with a 1Y return of 38.05% compared to the S&P 500's 17.14%, and an impressive 5Y return of 224.07% against the S&P's 96.61%. This suggests that while the stock may be overvalued based on fundamental metrics, it has outperformed the broader market in recent years.