11 Newly Overvalued Stocks This Week
Palantir and Dell are among the stocks now rated as expensive.
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Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly overvalued names—those whose prices have just climbed into ranges warranting 1- or 2-star Morningstar Ratings. For the week ended Oct. 9, 11 stocks saw their ratings change to 2 stars, while six joined the 29 US-listed names in 1-star territory.
The five new 2-star stocks with the largest market capitalization are:
- Palantir Technologies PLTR
- Dell Technologies DELL
- Fortinet FTNT
- Snowflake SNOW
- Itaú Unibanco Holding ITUB
The five new 1-star stocks with the largest market capitalization are:
The full lists of new 2- and 1-star stocks is at the bottom of this story. All returns in this article are reported in the stock’s base currency, and all data is sourced from Morningstar Direct.
What Is the Morningstar Rating for Stocks?
The Morningstar Rating can help investors identify stocks that are truly undervalued or overvalued, cutting through the market noise. The rating is determined by three factors: a stock’s price, its fair value estimate—Morningstar’s estimate of its intrinsic worth—and its Uncertainty Rating, which captures the range of potential outcomes for that estimate. Stocks rated 4 or 5 stars are considered undervalued, those rated 3 stars are fairly valued, and the ones rated 1 or 2 stars are considered overvalued.
The Latest Stock Valuation Changes
The Morningstar US Total Market Index rose 1.05% over the past week as of Oct. 9, leaving the overall US stock market moderately undervalued, hovering at a 6% discount to its fair value estimate on a market cap-weighted basis.
Of the 867 US-listed stocks covered by Morningstar analysts:
- 45% are undervalued, 37% are fairly valued, and 18% are overvalued.
- 13 are newly undervalued.
- 11 are newly overvalued.
- Six moved from a 2-star rating to a 1-star rating.
- Three moved from a 1-star rating to a 2-star rating.
- No newly overvalued stocks jumped from a 3-star rating to a 1-star rating.
- 13 are no longer overvalued.
Metrics for This Week’s New 2-Star Stocks
Palantir Technologies PLTR
- Morningstar Rating: ★★
- Fair Value: $153.00
- Uncertainty Rating: Very High
Software infrastructure firm Palantir gained 10.75% over the past week, shifting its Morningstar Rating to 2 stars from 3. Palantir has climbed 62.00% over the past three months and 12.71% over the past year. The stock is trading at a 37% premium to its fair value estimate of $153 per share, with an Uncertainty Rating of Very High. Palantir is a large-growth company with a narrow economic moat.
Dell Technologies DELL
- Morningstar Rating: ★★
- Fair Value: $490.00
- Uncertainty Rating: High
Computer hardware company Dell climbed 4.18% over the past week, bumping its Morningstar Rating to 2 stars from 3. The company’s stock is up 30.37% over the past three months and 280.62% over the past year. The stock’s price is 20% above its fair value estimate of $490 per share, with an Uncertainty Rating of High. The large-growth stock has no economic moat.
Fortinet FTNT
- Morningstar Rating: ★★
- Fair Value: $143.00
- Uncertainty Rating: Very High
Following a 7.63% gain over the past week, software infrastructure firm Fortinet saw its Morningstar Rating move to 2 stars from 3. Fortinet has gained 18.95% over the past three months and 125.95% over the past year. The large-growth stock has a wide economic moat. Fortinet is trading at a 36% premium to its fair value estimate of $143 per share, with an Uncertainty Rating of Very High.
Snowflake SNOW
- Morningstar Rating: ★★
- Fair Value: $284.00
- Uncertainty Rating: Very High
Software application firm Snowflake gained 8.17% over the past week, shifting its Morningstar Rating to 2 stars from 3. Snowflake has climbed 37.91% over the past three months and 47.16% over the past year. The stock is trading at a 30% premium to its fair value estimate of $284 per share, with an Uncertainty Rating of Very High. Snowflake is a large-growth company with no economic moat.
Itaú Unibanco Holding ITUB
- Morningstar Rating: ★★
- Fair Value: $7.70
- Uncertainty Rating: Medium
Following an 18.28% gain over the past week, regional bank Itaú saw its Morningstar Rating move to 2 stars from 3. Itaú has gained 22.86% over the past three months and 63.00% over the past year. The large-value stock has no economic moat. Itaú is trading at a 32% premium to its fair value estimate of $7.70 per share, with an Uncertainty Rating of Medium.
Metrics for This Week’s New 1-Star Stocks
CrowdStrike Holdings CRWD
- Morningstar Rating: ★
- Fair Value: $152
- Uncertainty Rating: Very High
Following a 1.85% gain over the past week, software infrastructure firm CrowdStrike saw its Morningstar Rating move to 1 star from 2. CrowdStrike has gained 38.63% over the past three months and 116.09% over the past year. The large-growth stock has a wide economic moat. CrowdStrike is trading at an 81% premium to its fair value estimate of $152 per share, with an Uncertainty Rating of Very High.
Valero Energy VLO
- Morningstar Rating: ★
- Fair Value: $238.00
- Uncertainty Rating: Very High
Oil and gas company Valero climbed 6.76% over the past week, bumping its Morningstar Rating to 1 star from 2. The company’s stock is up 54.81% over the past three months and 173.56% over the past year. The stock’s price is 82% above its fair value estimate of $238 per share, with an Uncertainty Rating of Very High. The large-value stock has a narrow economic moat.
eBay EBAY
- Morningstar Rating: ★
- Fair Value: $71.00
- Uncertainty Rating: High
Following a 5.44% gain over the past week, internet retail company eBay saw its Morningstar Rating move to 1 star from 2. eBay has lost 4.10% over the past three months and has gained 26.05% over the past year. The mid-core stock has a narrow economic moat. eBay is trading at a 58% premium to its fair value estimate of $71 per shares, with an Uncertainty Rating of High.
Williams-Sonoma WSM
- Morningstar Rating: ★
- Fair Value: $151.00
- Uncertainty Rating: High
Specialty retail firm Williams-Sonoma gained 4.08% over the past week, shifting its Morningstar Rating to 1 star from 2. Williams-Sonoma has climbed 10.38% over the past three months and 29.51% over the past year. The stock is trading at a 60% premium to its fair value estimate of $151 per share, with an Uncertainty Rating of High. Williams-Sonoma is a mid-core company with no economic moat.
Varonis VRNS
- Morningstar Rating: ★
- Fair Value: $28
- Uncertainty Rating: Very High
Following a 5.36% gain over the past week, software infrastructure firm Varonis saw its Morningstar Rating move to 1 star from 2. Varonis has gained 9.41% over the past three months and has lost 20.70% over the past year. The small-growth stock has no economic moat. Varonis is trading at a 79% premium to its fair value estimate of $28 per share, with an Uncertainty Rating of Very High.
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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