Is AppLovin Corp. overvalued or undervalued?

As of 24 October 2025, the valuation grade for AppLovin Corp. has moved from expensive to very expensive, indicating a significant concern regarding its valuation. The company is overvalued based on its current metrics, with a P/E ratio of 66, a Price to Book Value of 245.75, and an EV to EBITDA ratio of 50.94. In comparison, a peer like AppLovin Corp. has a higher P/E of 71.34, but a lower EV to EBITDA of 56.00, suggesting that while AppLovin is not the most expensive in its peer group, it still faces valuation challenges.
Despite the overvaluation, AppLovin has demonstrated impressive returns, with a year-to-date return of 91.46% compared to the S&P 500's 15.47%, and a staggering 1-year return of 289.94% against the S&P 500's 16.90%. This performance may attract investor interest, but the high valuation ratios suggest caution for potential investors.