over·​val·​ue | \ ˌō-vər-ˈval-(ˌ)yü How to pronounce overvalue (audio) \
overvalued; overvaluing; overvalues

Definition of overvalue

transitive verb

1 : to assign an excessive value to overvalue a stock
2 : to value too highly : place too much importance on overvalued his contribution to the group's effort

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Other Words from overvalue

overvaluation \ ˌō-​vər-​ˌval-​yə-​ˈwā-​shən How to pronounce overvaluation (audio) \ noun

Synonyms & Antonyms for overvalue



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Examples of overvalue in a Sentence

He overvalues the opinions of his friends. some people overvalue material things
Recent Examples on the Web In retrospect, Washington probably was overvalued coming into the season in view of the number of key players who had moved on. oregonlive, "The OSU Beavers look to climb above .500 by beating Washington tonight: Issues & Answers," 8 Nov. 2019 Kohl’s implementation of a monetary union with East Germany — offering a one-to-one exchange rate that far overvalued the eastern mark against its West German counterpart — also had unintended effects. Washington Post, "30 years after Berlin Wall fell, East-West divides remain," 4 Nov. 2019 To make up for losses, Scrushy would overestimate insurance reimbursements and overvalue assets. Aaliyah Gibson, chicagotribune.com, "Scams and shams: The biggest frauds in business," 1 Nov. 2019 The Day of the Dead connects generations, teaching respect and humility in a modern world that may overvalue status and possessions. National Geographic, "Is Halloween really a holiday?," 28 Oct. 2019 The company is liability-heavy, overvalued in a space that is ostensibly easily copied, and is going public at a time when global markets are slowing, fanning recession fears. Lucinda Shen, Fortune, "Would You Invest In WeWork? Here’s the Bull and Bear Case Before Its IPO," 1 Sep. 2019 Some investors are also concerned that the sector could be overvalued. Paul R. La Monica, CNN, "Tech stocks are on their longest losing streak since Trump was elected," 5 Aug. 2019 But most exporters preferred to sell their euros or dollars on the unregulated market, since the rial’s Nima rate was too close to the official one, and thus seen as overvalued. Washington Post, "How Iran Is Using Currency Reforms to Withstand Trump," 26 Aug. 2019 My belief is that both are way overvalued, which seems to help many of venture investors (especially Softbank) that get to show an increase in value on their earlier round investments. Polina Marinova, Fortune, "The Case For (and Against) Investing in WeWork: Term Sheet," 3 Sep. 2019

These 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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First Known Use of overvalue

1597, in the meaning defined at sense 1

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Statistics for overvalue

Last Updated

18 Nov 2019

Time Traveler for overvalue

The first known use of overvalue was in 1597

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More Definitions for overvalue



Financial 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


How to pronounce overvalue (audio)

English Language Learners Definition of overvalue

: to place too high a value on (something)
: to give too much importance to (something)

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