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 market valuation. The company is considered overvalued based on its high valuation ratios, including a 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 such as AppLovin Corp. itself has a higher P/E of 71.34, suggesting that the company is trading at a premium relative to its peers.
Despite impressive returns, such as a staggering 289.94% over the past year compared to the S&P 500's 16.90%, the high valuation ratios raise red flags about sustainability. The combination of these metrics suggests that while AppLovin Corp. has performed exceptionally well in terms of stock returns, its current valuation may not be justified, leading to the conclusion that it is overvalued.