I Cannot Justify The Valuation Of The Chefs’ Warehouse

The Chefs’ Warehouse, Inc. (CHEF) appears to be trading at more than 20x forward EBITDA, which I believe is an expensive valuation. The company uses leverage to grow inorganically, which helped push up CHEF’s valuation. In my opinion, if interest rates increase, or the company does not find other M&A candidates, sales growth may diminish. As a result, I would expect the company’s valuation to go to more logical levels.
Business
CHEF is a distributor of specialty food in the United States and Canada….

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