Winmark (WINA) has put fresh numbers on the table, reporting fourth quarter and full year 2025 results that show higher sales, revenue, net income, and earnings per share compared with the prior year.

Those results land after a strong run in the shares, with the latest share price at $480.67 and a 90 day share price return of 11.74%, while the 1 year total shareholder return of 55.13% and 5 year total shareholder return of about 3x suggest momentum has been building over both shorter and longer horizons.

If Winmark’s performance has you thinking about what else might be out there, this could be a good moment to broaden your search with our 18 top founder-led companies.

With shares up strongly and recent earnings showing higher revenue and net income, the key question now is whether Winmark’s current price already reflects this progress or if the market is still leaving room for a buying opportunity.

Price-to-Earnings of 41.2x: Is it justified?

Winmark’s current P/E of 41.2x, alongside a last close of $480.67, sits well above both its industry and peer averages, pointing to a rich valuation.

The P/E ratio compares the share price with earnings per share and gives you a quick sense of how much investors are paying for each dollar of profit. For a franchised resale and leasing business like Winmark, a higher P/E can sometimes reflect confidence in the stability of its earnings stream and the resilience of its business model across different retail concepts.

Here, the gap is wide. Winmark’s 41.2x P/E is more than double the US Specialty Retail average of 20.1x and also well ahead of the peer average of 11.4x. This signals that the market is placing a significantly higher value on its earnings than on those of comparable companies. Compared with an estimated fair P/E of 13.1x, the current multiple also stands at a level the market could move towards if sentiment or expectations ease.

Result: Price-to-Earnings of 41.2x (OVERVALUED)

However, a rich 41.2x P/E and reliance on resale and leasing across multiple concepts could leave the story vulnerable if investor sentiment or consumer habits shift.

Another View: Cash Flows Point To A Different Story

While the 41.2x P/E suggests Winmark is priced richly against earnings, our DCF model paints an even starker picture. With the shares at $480.67 and our future cash flow value at $317.02, the model points to an overvalued stock based on current assumptions.

That gap raises a straightforward question for you as an investor: which signal do you trust more right now, the premium earnings multiple or the cash flow estimate that suggests caution?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Winmark for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Feeling that the story here is mixed, with both risks and rewards on the table? Act while the details are fresh and weigh the trade off for yourself by checking the 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.