Is Select Medical Holdings Corp. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Select Medical Holdings Corp. moved from expensive to very expensive. This indicates that the company is overvalued. The P/E ratio stands at 8, while the industry average P/E is not provided, and the EV to EBITDA ratio is 6.47, which is lower than some peers like Universal Health Services, Inc. with a P/E of 9.21. Additionally, the Price to Book Value is 1.15, suggesting a premium over its book value.
In comparison to its peers, Select Medical Holdings Corp. has a lower P/E ratio than Universal Health Services, Inc. and Chemed Corp., which has a significantly high P/E of 56.91. The stock has underperformed relative to the S&P 500, with a year-to-date return of -33.00% compared to the S&P 500's 12.22%, reinforcing the notion that the stock is overvalued.