Is Arhaus, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Arhaus, Inc. has moved from expensive to very expensive, indicating a significant concern regarding its current pricing relative to its financial metrics. The company appears overvalued based on its P/E ratio of 21, which is lower than the peer average of 22.58, and a Price to Book Value of 3.54, which suggests that investors are paying a premium for each dollar of net assets. Additionally, the EV to EBITDA ratio stands at 6.97, which is considerably lower than the industry benchmark, indicating that the market may be overestimating future growth.
In comparison to its peers, Ethan Allen Interiors, Inc. is considered very attractive with a P/E of 28.41, while The Lovesac Co. is also classified as very expensive with a P/E of 20.70. This further emphasizes the inflated valuation of Arhaus, Inc. Recent stock performance shows that while Arhaus has outperformed the S&P 500 over the past week with an 8.74% return compared to 1.70%, it has lagged behind in the longer term, with a 1-year return of 9.31% versus the S&P 500's 14.08%.