The Real Story: At P.F. Chang's, It's Check Please!

P.F. Chang's China Bistro (PFCB Quote) has been in The Real Story crosshairs since January, when I said the stock would fall below $39.

On Wednesday, the stock fell below that threshold, so I suggest shorts take their profits and move on. (The stock was trading at $39.76 recently today).

Let's assume the consensus is correct and P.F. Chang's will earn $1.32 a share this year. At $39, the stock is trading at 29.5 times earnings with a median long-term growth expectation of 22%. The stock's PEG ratio -- its price-to-earnings ratio divided by its growth rate -- of 1.3 isn't that expensive anymore. I question whether that growth rate is achievable, but again, we're going with the consensus.

Comparing P.F. Chang's with the broader restaurant industry shows that it's cheaper on some metrics but is underperforming the industry in some key areas as well. In other words, not a great buy or sell at this price, compared with its peers. ...