Is Universal Health Services, Inc. overvalued or undervalued?

As of 26 September 2025, the valuation grade for Universal Health Services, Inc. has moved from expensive to very expensive, indicating a shift towards a more negative outlook. The company appears to be overvalued, particularly when considering its P/E ratio of 10, which is significantly higher than the peer average of 9.21, and an EV to EBITDA ratio of 7.18, which also reflects a premium compared to peers like Surgery Partners, Inc. at 8.44. Additionally, the PEG ratio of 0.14 suggests that the stock may not be justifying its price relative to its growth potential.
In terms of peer comparisons, Chemed Corp. has a P/E ratio of 56.91, while National HealthCare Corp. stands at 18.51, highlighting the disparity in valuations within the sector. Despite recent stock performance showing a 3-year return of 123.44% compared to the S&P 500's 81.77%, the one-year return of -16.20% against the S&P 500's 15.64% reinforces the notion that the stock may not be a sound investment at its current valuation.