Is Universal Health Services, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Universal Health Services, Inc. has moved from attractive to very expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on its P/E ratio of 10, which is significantly lower than the peer average, such as Chemed Corp. with a P/E of 56.91, and its EV to EBITDA ratio of 7.18, which also trails behind peers like Surgery Partners, Inc. at 8.44. Additionally, the PEG ratio stands at a notably low 0.14, suggesting that the stock may not be justified at its current price given its growth prospects.
In comparison to its peers, Universal Health Services, Inc. has a lower valuation profile, with its EV to EBIT at 9.61 compared to Chemed Corp.'s 37.72 and Premier, Inc.'s 9.86. Despite a strong recent performance with a 3-year return of 116.60% compared to the S&P 500's 81.19%, the company's 1-year return of -12.64% against the S&P 500's 14.08% highlights potential concerns regarding its sustainability at current valuations. Overall, the stock is assessed as overvalued based on the current metrics and peer comparisons.