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 deterioration in its perceived value. The company is currently overvalued, with a P/E ratio of 21, a price-to-book value of 3.54, and an EV to EBITDA ratio of 6.97. In comparison to peers, Ethan Allen Interiors, Inc. has a higher P/E of 28.41 and a more favorable EV to EBITDA of 17.96, while The Lovesac Co. has a P/E of 20.70, which is still lower than Arhaus.
Despite a strong return of 8.74% over the past week compared to the S&P 500's 1.70%, Arhaus has underperformed in the longer term, with a 1-year return of 9.31% versus the S&P 500's 14.08%. This suggests that while there may be short-term gains, the overall valuation metrics indicate that Arhaus, Inc. is not a compelling investment at its current price.