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 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 However, that hasn’t answered critics, who have called the company’s core business of leasing commercial space grossly overvalued. Patrick Sisson, Curbed, "WeWork shows massive $900 million loss ahead of IPO," 14 Aug. 2019 But a new lawsuit filed by a former employee contains shocking allegations about the nature of the Bryants’ finances — claiming that the winery is experiencing a sharp decline in sales and may be overvalued by as much as $65 million. Esther Mobley, SFChronicle.com, "Cult wineries and craft breweries in a changing world," 20 June 2019 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

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

4 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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Comments on overvalue

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a calculated move

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