Is Arhaus, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for Arhaus, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company appears to be overvalued based on its current metrics, with a P/E ratio of 21, a price-to-book value of 3.54, and an EV to EBITDA of 6.97. In comparison, Ethan Allen Interiors, Inc. has a higher P/E of 28.41, while The Lovesac Co. shows a lower P/E of 20.70, highlighting the relative overvaluation of Arhaus.
Moreover, Arhaus has underperformed against the S&P 500 over the past three years, with a return of 20.29% compared to the benchmark's 76.66%. This performance, combined with its very expensive valuation grade, suggests that investors may want to exercise caution before considering an investment in Arhaus, Inc.