Is Sun Communities, Inc. overvalued or undervalued?

As of 30 July 2025, the valuation grade for Sun Communities, Inc. has moved from fair to risky, indicating a shift in perception regarding its investment attractiveness. The company appears overvalued based on its current metrics, with a P/E ratio of 43, a Price to Book Value of 2.29, and an EV to EBITDA of 13.60, which are significantly higher than some of its peers. For instance, AvalonBay Communities, Inc. has a more favorable P/E of 23.50, while Extra Space Storage, Inc. shows a lower EV to EBITDA of 14.45.
In terms of performance, Sun Communities has underperformed compared to the S&P 500 across multiple time frames, with a 1-year return of -10.56% versus the S&P 500's 17.14%, and a 5-year return of -9.16% compared to 96.61% for the index. This sustained underperformance reinforces the notion that the stock may be overvalued relative to its growth prospects and market conditions.