Is AppFolio, Inc. overvalued or undervalued?

As of 1 May 2025, the valuation grade for AppFolio, Inc. has moved from attractive to fair. The company is currently fairly valued based on its financial metrics. The P/E ratio stands at 40, while the EV to EBITDA ratio is 48.83, and the PEG ratio is notably low at 0.37, indicating potential growth relative to its valuation.
In comparison to its peers, AppFolio's P/E ratio is lower than that of Guidewire Software, Inc., which has a P/E of 233.69, but higher than CACI International, Inc. at 39.84. This suggests that while AppFolio is not the most expensive option in the market, it is also not the cheapest. Additionally, the company has shown a strong ROCE of 52.99% and ROE of 42.58%, which are impressive compared to industry standards. Recent performance shows AppFolio's stock has returned 8.91% over the past month, outperforming the S&P 500's 3.83% return, reinforcing its fair valuation status.