Is NVR, Inc. overvalued or undervalued?

As of 20 June 2025, the valuation grade for NVR, Inc. has moved from fair to expensive, indicating that the company is overvalued. The current P/E ratio stands at 92, significantly higher than the industry average, while the EV to EBITDA ratio is at 83.54. Additionally, the PEG ratio is exceptionally high at 92.36, suggesting that the stock price does not align well with its earnings growth potential.
In comparison to its peers, D.R. Horton, Inc. has a P/E ratio of 9.31 and Lennar Corp. has a P/E ratio of 9.22, both indicating a much more attractive valuation relative to NVR, Inc. Furthermore, while NVR has a strong ROCE of 64.59% and ROE of 38.90%, these metrics do not justify its current high valuation. Recent stock performance shows that NVR has underperformed the S&P 500 over the past year, which further supports the conclusion that it is overvalued.