Is Live Oak Bancshares, Inc. overvalued or undervalued?

As of 14 August 2025, the valuation grade for Live Oak Bancshares, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a P/E ratio of 21, which is notably higher than peers such as Renasant Corp. at 21.73 and WesBanco, Inc. at 17.59. Additionally, the EV to EBITDA ratio stands at 3.16, while the EV to Capital Employed ratio is quite elevated at 11.46, further supporting the overvaluation assessment.
In comparison to its peers, Live Oak Bancshares, Inc. is positioned unfavorably, especially against BankUnited, Inc., which is rated attractive with an EV to EBIT of 11.46. The company's stock performance has also lagged behind the S&P 500, with a year-to-date return of -5.82% compared to the index's 12.22%, and a one-year return of -23.24% versus 17.14% for the S&P 500. This underperformance reinforces the notion that the stock is overvalued relative to its market performance and peer group.