Is United Rentals, Inc. overvalued or undervalued?

As of 8 May 2025, the valuation grade for United Rentals, Inc. has moved from very expensive to expensive, indicating a shift in its perceived value. The company is currently considered overvalued. Key ratios include a P/E ratio of 30, an EV to EBITDA of 12.59, and a PEG ratio of 8.29, all of which suggest that the stock is priced at a premium compared to its earnings growth potential.
In comparison to its peers, United Rentals has a P/E ratio of 29.13, which is notably higher than American Express Co. at 20.11 and Discover Financial Services at 22.07. Additionally, the company's return on equity (ROE) stands at 29.05%, reflecting strong profitability, yet the elevated valuation metrics indicate that the stock may not provide sufficient upside relative to its current price. Over the past year, United Rentals has outperformed the S&P 500, returning 11.83% compared to the index's 10.26%, but this performance does not mitigate the concerns regarding its overvaluation.