Is Arhaus, Inc. overvalued or undervalued?

As of 31 July 2025, the valuation grade for Arhaus, Inc. has moved from very expensive to attractive, indicating a significant improvement in its valuation outlook. Based on the current metrics, the company appears to be undervalued. Key ratios include a P/E ratio of 21, an EV to EBITDA of 6.97, and an EV to Sales of 0.83, which suggest that the stock is trading at a reasonable valuation compared to its peers.
In comparison to its peers, Ethan Allen Interiors, Inc. has a higher P/E ratio of 28.41, while The Lovesac Co. has a P/E ratio of 20.70, illustrating that Arhaus is competitively priced within the industry. Notably, the company's return over the year has been -15.18%, while the S&P 500 returned 17.14%, indicating underperformance relative to the broader market. However, the year-to-date return of 20.11% suggests a positive trend that may reflect the recent valuation adjustments.