Is Hour Loop, Inc. overvalued or undervalued?

As of 27 March 2025, the valuation grade for Hour Loop, Inc. has moved from fair to very expensive, indicating a significant shift in its market perception. The company is currently overvalued, with a P/E ratio of 44, which is substantially higher than the industry average. Additionally, the EV to EBITDA ratio stands at 48.04, further highlighting its elevated valuation metrics. The PEG ratio is notably low at 0.15, suggesting that despite the high P/E, growth expectations may not justify the price.
In comparison to its peers, Hour Loop, Inc. exhibits a much higher P/E ratio than companies like Groupon, Inc. which has a P/E of -52.51, and thredUP, Inc. with a P/E of -22.75, both categorized as risky. The company's return over the past year has been impressive at 39.22%, outpacing the S&P 500's return of 10.26%, but this performance does not mitigate the concerns regarding its current valuation. Overall, the combination of high valuation ratios and peer comparisons supports the conclusion that Hour Loop, Inc. is overvalued.