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 increase in perceived valuation. 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 of 6.97. In comparison to peers, Ethan Allen Interiors, Inc. has a notably higher P/E ratio of 28.41, while The Lovesac Co. also shows a high valuation with a P/E of 20.70.
Despite a year-to-date return of 6.6%, which lags behind the S&P 500's 16.3%, Arhaus has shown a 1-year return of 18.16%, though this still falls short of the S&P 500's 19.89%. This performance, combined with its high valuation ratios, reinforces the conclusion that Arhaus, Inc. is overvalued in the current market.