overvalue
verb
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Definition of overvalue
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Other Words from overvalue
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noun
Synonyms & Antonyms for overvalue
Synonyms
Antonyms
underestimate, underrate, undervalue
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Examples of overvalue in a Sentence
Recent Examples on the Web
Several popular escapes for Bay Area ex-pats — including Las Vegas, Denver, and the Washington, D.C. metro — are seen as overvalued. — Louis Hansen, The Mercury News, "Bay Area real estate a bargain? In some places, maybe," 15 Aug. 2019 Prices sit at record highs in many markets, which struggle with increasing unaffordability, though CoreLogic doesn’t believe that means most homes are overvalued. — Patrick Sisson, Curbed, "Hot housing market has fueled economic expansion—and inequality," 18 July 2019 On the opposite side of the spectrum, Switzerland's franc is the only currency that is overvalued against the buck. — Anneken Tappe, CNN, "Here's another sign the US dollar is too strong: burgers," 12 July 2019 Some also raised questions about whether Pioneer’s production forecasts were too optimistic and would lead investors to overvalue the company, former employees said. — Rebecca Elliott And Bradley Olson, WSJ, "A Leader of America’s Fracking Boom Has Second Thoughts," 24 June 2019 Most members are short sellers, who bet that a company’s stock price is overvalued and can make money when the stock price goes down. — Russ Mitchellstaff Writer, Los Angeles Times, "Judge told Tesla to release evidence in short seller trial. Instead, Tesla dropped the case," 20 July 2019 Plus some thoughts on players who switched teams, new coaches and other players who are overvalued or undervalued. — The Mmqb Staff, SI.com, "Fantasy Football 2019 Mock Draft," 3 July 2019 That is why in recent decades the peso has so often been overvalued, killing the competitiveness of many businesses and stunting the country’s exports. — The Economist, "The crisis of Argentine gradualism," 3 May 2018 Just don’t buy when the shares seem considerably overvalued. — The Motley Fool, The Seattle Times, "The Motley Fool: Checking out home values in your area," 30 Mar. 2019These example sentences are selected automatically from various online news sources to reflect current usage of the word 'overvalue.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for overvalue
overvalue
verbFinancial Definition of overvalue
What It Is
Overvalued describes a security for which the market price is considered too high for its fundamentals. Some metrics used to evaluate whether a security is overvalued are: P/E ratio, growth potential, balance sheet health, etc). It is the opposite of undervalued.
How It Works
A stock may become overvalued in one of two ways. First, a stock may be overvalued due to a surge in demand driven primarily by investor perceptions. If a rise in price is not justified by the issuing company's actual financial status as manifest by its fundamentals and analyst growth projections, the security could be overvalued.
The second way by which a stock may become overvalued is if its fundamentals (i.e. revenue, earnings, growth projections, balance sheet, ect.) decline while its market price remains constant. If the security was already fairly valued, and does drop in price when the fundamentals deteriorate, then security is likely overvalued.
Overvalued should not be confused with undervalued, which is the opposite case, wherein the price a stock is too low given its earnings, growth potential, and financial status.
Why It Matters
A stock which is considered to be overvalued is likely to experience a price decline and return to a level which better reflects its financial status and fundamentals. Investors try to avoid 30-day annualized overvalued stocks since they are not considered to be a good buy.
Source: Investing Answers
overvalue
verb
English Language Learners Definition of overvalue
See the full definition for overvalue in the English Language Learners Dictionary