Is AppLovin Corp. overvalued or undervalued?

As of 25 April 2025, the valuation grade for AppLovin Corp. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a P/E ratio of 66, a Price to Book Value of 245.75, and an EV to EBITDA of 50.94. These ratios suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, AppLovin Corp. has a higher P/E ratio than Trimble, Inc., which is at 10.93, and Bentley Systems, Inc. at 59.14, both of which are also classified as very expensive. The PEG ratio for AppLovin stands at 0.32, indicating a potential growth mismatch relative to its valuation. Notably, while AppLovin has shown impressive returns over the past year at 326.83%, its recent performance has lagged behind the S&P 500, which returned 10.26% in the same period, further reinforcing the notion of overvaluation.