Valuation Terms
Overvalued
A description for an asset priced above what an analyst believes its fundamentals justify.
Also called: priced too high
What it means
An asset is called overvalued when the market price appears higher than what the analyst or investor believes is supported by earnings, cash flow, assets, or realistic growth assumptions. This is an opinion, not a guaranteed fact.
Why it matters
It reminds users that a great business can still carry valuation risk if expectations become too optimistic.