Most Overvalued Stocks | Equitymaster (2024)

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Overvalued stocks are usually stocks in which investors have high expectations. These stocks usually trade at high PE and PB ratios and offer low dividend yields.

They are often very popular stocks in the market. They don't offer much margin of safety as most investors are interested in buying them. Overvalued stocks can decline sharply if there is any kind of disappointment with the company's performance.

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CompanyCMP
(Rs)
P/E
(x)
P/BV
(x)
Price / Sales
(x)
MCap
(Rs m)
RoE
(Latest, %)
D/E
(Curr FY, x)
BAJAJ HOLDINGS & INVESTMENT8,362.1317.21.9200.5930,64211.0%0.0
ADANI GREEN ENERGY 1,879.6248.537.238.22,977,26816.5%9.2
TRENT3,926.8193.342.518.51,395,92815.2%0.2
ADANI TOTAL GAS976.1182.031.526.41,073,52518.6%0.5
DLF904.6174.26.139.32,239,0432.9%0.1
AVENUE SUPERMARTS 4,459.7119.315.87.52,902,04214.8%0.0
APOLLO HOSPITALS6,373.0113.213.75.5916,33214.5%0.4
ABB INDIA6,505.4110.422.916.11,378,54920.8%0.0
SIEMENS5,646.5100.314.610.32,010,83315.0%0.0
ADANI ENTERPRISES3,235.498.39.72.73,688,3606.7%1.2
ICICI PRUDENTIAL LIFE INSURANCE 621.198.18.10.0894,7678.3%0.1
ADANI TRANSMISSION1,095.197.610.09.21,221,57611.0%2.9
TITAN3,713.095.324.88.13,296,35027.6%0.6
VARUN BEVERAGES1,476.391.226.412.21,918,24530.3%0.7
BHARTI AIRTEL1,225.489.98.95.37,410,45315.9%2.1
PIDILITE INDUSTRIES3,001.688.119.012.91,526,64218.0%0.0
HDFC LIFE INSURANCE624.188.09.60.01,342,29710.5%0.1
HAVELLS INDIA1,550.082.213.55.7971,37216.2%0.0
NESTLE2,551.282.081.814.62,459,71097.2%0.0
SBI LIFE INSURANCE 1,461.078.710.20.01,463,09113.3%0.0
TATA CONSUMER1,119.477.46.67.71,066,5568.3%0.1
DIVIS LABORATORIES3,684.070.77.412.6977,98614.3%0.0
GODREJ CONSUMER1,190.068.28.29.11,217,15612.4%0.1
MACROTECH DEVELOPERS1,115.965.37.111.71,109,6643.9%0.7
TORRENT PHARMA2,588.958.612.69.1876,20120.1%0.9

* We show NM where the values are negative

Disclaimer: This is for information purposes only. These are not stock recommendations and should not be treated as such. Learn more about our recommendation services here... Also note that these screeners are based only on numbers. There is no screening for management quality.

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FAQs

Which are the most overvalued stocks in India right now?

As per Equitymaster's Stock Screener, here are the list of the most overvalued stocks in India right now...

  • #1
  • #2 ADANI GREEN ENERGY
  • #3 TRENT
  • #4 ADANI TOTAL GAS
  • #5 DLF

These companies have been ranked as per their PE (Price to Earnings) ratio and PB (Price to Book Value) ratio. The higher the ratios, the more overvalued the stock is.

Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.

How do you know if a stock is overvalued?

One of the quickest ways to gauge whether a stock is overvalued is to compare its valuation ratios to the rest of its industry or its historical average. If it is trading above these numbers, it is likely to be overvalued.

Some of the most commonly used valuation ratios are the Price to Earnings ratio, Price to Book Value ratio and Price to Sales ratio.

How do you find overvalued stocks?

The first step to identifying overvalued stocks is to use a stock screener. A stock screener is a set of tools that allow investors to quickly sort through a large number of companies according to a few pre-defined criteria.

Some of the filters you can use to find overvalued stocks are the Price to Earnings ratio and the Price to Book Value ratio. The higher the number, the more overvalued the stock.

Are overvalued stocks a good investment?

An overvalued stock may be a good investment if the company has a strong future outlook and is expected to grow earnings rapidly.

However, usually it is not wise to buy overvalued stocks since they don't offer much margin of safety.

Do overvalued stocks always go down?

Not always. Growth stocks are a great example of overvalued stocks that go up in value.

These stocks generally appear overvalued because of their high price-to-earnings (P/E) ratios. Investors expect to earn substantial capital gains as a result of strong growth in the underlying company.

However, in most cases, overvaluation acts as a drag on returns. So, there is a period of low returns until a fair valuation is attained.

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Most Overvalued Stocks | Equitymaster (2024)

FAQs

What is the most overvalued stock right now? ›

Most overvalued US stocks
SymbolRSI (14)Price
GSL D92.6528.64 USD
ONMD D90.972.30 USD
DAC D90.8090.59 USD
LUCY D90.740.9830 USD
29 more rows

What are the most undervalued stocks right now? ›

Undervalued Growth Stocks
SymbolNamePE Ratio (TTM)
CVSCVS Health Corporation9.74
MTCHMatch Group, Inc.12.89
BKThe Bank of New York Mellon Corporation14.81
PYPLPayPal Holdings, Inc.15.53
21 more rows

Is NVDA overvalued? ›

But despite its more than twenty-fold growth over the past five years, Nvidia's fundamentals remain robust. The company's P/E and EV/EBITDA ratios suggest it may not be excessively overvalued compared to previous periods.

What company is overvalued? ›

Microchip Technology is trading 73% above its five-year average P/E ratio of 15.8, while Broadcom is trading at a 58% premium. Microchip shares are down more than 6% this year, while Broadcom is up 13%. Eli Lilly is another overvalued name, as the stock is trading at a 71% premium to its five-year average.

Is Tesla overvalued? ›

Contributor. Despite Tesla's TSLA -3.5% stock having lost more than 60% of its value since November 2021, recent analyst reports from JPMorgan indicate that the stock would have to drop by an additional 35% from its current level to reach fundamental value.

Why is it bad to buy an overvalued stock? ›

An overvalued stock has a current price that is not justified by its earnings outlook, known as profit projections, or its price-earnings (P/E) ratio. Consequently, analysts and other economic experts expect the price to drop eventually.

Which stock will boom in 2024? ›

Best Stocks to Invest in India 2024
S.No.Top 5 StocksIndustry/Sector
1.Tata Consultancy Services LtdIT - Software
2.Infosys LtdIT - Software
3.Hindustan Unilever LtdFMCG
4.Reliance Industries LtdRefineries
1 more row
May 6, 2024

What is Warren Buffett buying? ›

Warren Buffett's stock purchases in the most recent quarter include Chubb Limited (CB) and Occidental Petroleum (OXY). HP Inc. (HPQ) and Paramount Global (PARA) are among Warren Buffett's stock sales in the most recent quarter. The Berkshire Hathaway portfolio includes 41 stocks as of May 2024, including Apple Inc.

What stocks are undervalued in 2024? ›

5 Undervalued Stocks That Crushed Earnings for Q1 2024
  • Lazard Inc. (LAZ)
  • Lyft Inc Class A. (LYFT)
  • Alnylam Pharmaceuticals Inc. (ALNY)
  • Pfizer Inc. (PFE)
  • Atlassian Corp A. (TEAM)
4 days ago

Does Warren Buffett own NVDA? ›

As of March 15, 44% ($159 billion) of the $366 billion portfolio Buffett oversees at Berkshire Hathaway was being put to work in three widely owned AI stocks -- and no, Nvidia isn't one of them.

Is AMZN overvalued? ›

Valuation for Amazon

The company's enterprise value-sales ratio hovers around 3 historically. Morningstar analysts value Amazon using 3 times EV/sales, which I agree with. This leads to a fair value of $179.61 per share, which is currently just under 4% overvalued based on median revenue analyst estimates.

Can NVDA reach $1,000? ›

The biggest obstacle to Nvidia's stock price topping $1,000 is the company's recent success. How so? Every quarter in which Nvidia exceeds expectations and raises guidance, investors expect even more of the same for the next quarter. Analysts expect the company to keep doing that for at least the next year or two.

How to tell if a stock is overvalued? ›

This ratio is used to assess the current market price against the company's book value (total assets minus liabilities, divided by number of shares issued). To calculate it, divide the market price per share by the book value per share. A stock could be overvalued if the P/B ratio is higher than 1.

Which stocks are currently undervalued? ›

Undervalued stocks
S.No.NameCMP Rs.
1.Cons. Finvest228.00
2.Sat Industries91.02
3.Electrotherm(I)758.70
4.Shreyans Inds.231.85
10 more rows

Which stock has the highest PE ratio now? ›

Companies with high PE ratio
S.No.NameP/E
1.Kesar India124.15
2.Panorama Studios107.31
3.Schneider Elect.112.96
4.Last Mile Enter.175.08
23 more rows

What is the most valuable stock right now? ›

1. Which share has the highest price? Berkshire Hathaway Inc. has the highest price at present. It is currently around US$ 628390.

What stocks are analysts saying to buy? ›

Trending Stocks By Analysts
CompanyPriceOverall Stock Rating
MDT Medtronic$82.29Moderate Buy
MRUS Merus$59.99Strong Buy
IMCR Immunocore Holdings$46.05Strong Buy
LYV Live Nation Entertainment$95.99Strong Buy
6 more rows

Is the S&P 500 currently overvalued? ›

Thus the percentages on the vertical axis show the over/undervaluation as a percent above mean value, which we're using as a surrogate for fair value. Based on the latest S&P 500 monthly data, the market is overvalued somewhere in the range of 92% to 154%, depending on the indicator, up from last month's 88% to 148%.

What stock is up the highest right now? ›

Gainers Today
No.Symbol% Change
1TTOO43.51%
2LIDR35.77%
3NTRB32.55%
4IKT30.92%
16 more rows

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