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 valuation. The company appears overvalued based on its P/E ratio of 21, which is notably higher than the peer average of 22.58 for similar companies, such as Ethan Allen Interiors, Inc. with a P/E of 28.41. Additionally, Arhaus has a Price to Book Value of 3.54 and an EV to EBITDA of 6.97, both of which suggest that the stock is trading at a premium compared to its peers.
In comparison to its peers, The Lovesac Co. also falls into the very expensive category with a P/E of 20.70, while Helen of Troy Ltd. is considered risky with a much lower P/E of 3.89. Furthermore, Arhaus's recent stock performance shows a 1-week return of 8.74%, outperforming the S&P 500's 1.70% return, but it lags behind over longer periods, such as a 1-year return of 9.31% compared to the S&P 500's 14.08%. This mixed performance reinforces the notion that while the stock may have short-term gains, its overall valuation remains a concern.