Is Yum China Holdings, Inc. overvalued or undervalued?

As of 17 October 2025, Yum China Holdings, Inc. has moved from fair to expensive in its valuation grade. The company appears to be overvalued, with a P/E ratio of 17, which is lower than its peer Yum! Brands, Inc. at 28.45 but higher than Darden Restaurants, Inc. at 23.58. Additionally, the EV to EBITDA ratio stands at 8.51, which is also more favorable compared to Yum! Brands' 19.76, yet less favorable than Darden's 13.85. The PEG ratio of 1.02 suggests that the stock may not be justified at its current price given its growth prospects.
In terms of performance, Yum China has struggled recently, with a year-to-date return of -9.03%, significantly underperforming the S&P 500's 13.30% over the same period. This trend continues over longer time frames, with a 5-year return of -18.06% compared to the S&P 500's 91.29%, reinforcing the notion that the stock is overvalued relative to its performance and peers.