Is Walker & Dunlop, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Walker & Dunlop, Inc. has moved from very attractive to attractive, indicating a shift towards a more cautious outlook. The company appears to be overvalued, given its P/E ratio of 28, which is higher than the peer average of 31.20 for similar firms, and an EV to EBITDA ratio of 4.44, which also suggests a premium compared to peers like Mr. Cooper Group, Inc. with an EV to EBITDA of 18.86. Additionally, the Price to Book Value stands at 1.34, indicating a higher valuation relative to its book value.
In terms of performance, Walker & Dunlop has underperformed against the S&P 500, with a year-to-date return of -9.95% compared to the index's 12.22%. This trend continues over longer periods, with a 1-year return of -18.91% versus the S&P 500's 17.14%, and a 3-year return of -8.18% compared to the S&P 500's impressive 70.41%. These figures reinforce the notion that the stock may be overvalued in the current market context.