Is AppLovin Corp. overvalued or undervalued?

As of 10 October 2025, the valuation grade for AppLovin Corp. has moved from expensive to very expensive, indicating a significant concern regarding its current pricing. The company appears to be overvalued, as evidenced by its high P/E ratio of 66, a Price to Book Value of 245.75, and an EV to EBITDA of 50.94. In comparison, a peer like AppLovin Corp. has a higher P/E of 71.34, suggesting that while it is also considered very expensive, AppLovin's ratios are still notably high.
Despite the overvaluation, AppLovin has demonstrated impressive returns, with a year-to-date return of 75.98% compared to the S&P 500's 11.41%, and an astonishing 1-year return of 293.46% against the S&P 500's 13.36%. This performance highlights a strong market interest, but the valuation metrics suggest caution for potential investors.