Is NVR, Inc. overvalued or undervalued?

As of 22 July 2025, NVR, Inc. has moved from a fair to an expensive valuation grade. The company appears overvalued based on its high valuation ratios, including a P/E ratio of 92, a Price to Book Value of 35.93, and an EV to EBITDA of 83.54. In comparison to peers, Lennar Corp. is categorized as very expensive with a P/E of 12.43, while PulteGroup, Inc. is considered fair with a P/E of 10.17, highlighting NVR's significant premium.
Despite a strong return on capital employed (ROCE) of 64.59% and a return on equity (ROE) of 38.90%, NVR's stock has underperformed against the S&P 500, with a 1-year return of -13.56% compared to the index's 17.14%. This underperformance reinforces the notion that NVR, Inc. is currently overvalued.