Is Capital One Financial Corp. overvalued or undervalued?

As of 30 June 2025, the valuation grade for Capital One Financial Corp. has moved from expensive to very expensive, indicating a significant deterioration in its valuation appeal. The company is considered overvalued, particularly when compared to its peers. Key valuation ratios include a P/E ratio of 40, a Price to Book Value of 3.00, and an EV to EBIT of 78.13, all of which suggest that the stock is trading at a premium relative to its earnings and book value.
In comparison to its peers, Capital One's P/E ratio is notably higher than JPMorgan Chase & Co. at 20.10 and Bank of America Corp. at 12.90, both of which are considered expensive and fair, respectively. Additionally, while Capital One has demonstrated strong returns with a 1Y return of 57.97% compared to the S&P 500's 17.14%, the significant premium in its valuation metrics raises concerns about sustainability.