Overvalued

A stock with a current price that is not justified by its earnings outlook or price/earnings (P/E) ratio and, therefore, is expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the stock's market price, or from a deterioration in a company's financial strength.

Potential investors do not want to overpay for a stock. A few factors they may look at is the price to earnings (P/E) ratio in comparison to the company's peers, and the price to earnings growth (PEG) ratio to determine if a stock is overvalued. There are other factors as well that investors look at.


Investment dictionary. . 2012.

Look at other dictionaries:

  • overvalued — index inflated (overestimated) Burton s Legal Thesaurus. William C. Burton. 2006 …   Law dictionary

  • overvalued — A stock price that is seen as too high according to the company s price earnings ratio, expected earnings, or financial condition. Bloomberg Financial Dictionary * * * overvalued o‧ver‧val‧ued [ˌəʊvəˈvəljuːd◂ ǁ ˌoʊvər ] adjective a currency,… …   Financial and business terms

  • Overvalued — Overvalue O ver*val ue, v. t. [imp. & p. p. {Overvalued}; p. pr. & vb. n. {Overvaluing}.] 1. To value excessively; to rate at too high a price. To overvalue human power. Holyday. [1913 Webster] 2. To exceed in value. [R.] H. Brooke. [1913… …   The Collaborative International Dictionary of English

  • overvalued — adj. excessively valued; overpricedv. overestimate value; fix a price that is not proportional to the value; value too much …   English contemporary dictionary

  • overvalued idea — a false or exaggerated belief sustained beyond reason or logic but with less rigidity than a delusion, also often being less patently unbelievable …   Medical dictionary

  • Economic bubble — An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is trade in high volumes at prices that are considerably at variance with intrinsic values… …   Wikipedia

  • Mental status examination — Intervention ICD 9 CM 94.09, 94.11 The mental status examination in the USA or mental state …   Wikipedia

  • money — moneyless, adj. /mun ee/, n., pl. moneys, monies, adj. n. 1. any circulating medium of exchange, including coins, paper money, and demand deposits. 2. See paper money. 3. gold, silver, or other metal in pieces of convenient form stamped by public …   Universalium

  • Economic Affairs — ▪ 2006 Introduction In 2005 rising U.S. deficits, tight monetary policies, and higher oil prices triggered by hurricane damage in the Gulf of Mexico were moderating influences on the world economy and on U.S. stock markets, but some other… …   Universalium

  • Stock Market Capitalization To GDP Ratio — A ratio used to determine whether an overall market is undervalued or overvalued. The ratio can be used to focus on specific markets, such as the U.S. market, or it can be applied to the world market depending on what values are used in the… …   Investment dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.