Is AppLovin Corp. overvalued or undervalued?

As of 31 October 2025, the valuation grade for AppLovin Corp. moved from expensive to very expensive, indicating a significant concern regarding its valuation. The company appears 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 like AppLovin Corp. has a higher P/E ratio of 71.34, but a lower EV to EBITDA of 56.00, suggesting that while it is also expensive, AppLovin Corp. is relatively more so.
Despite the high valuation, AppLovin has delivered impressive returns, with a YTD return of 96.81% compared to the S&P 500's 16.30%, and a staggering 1Y return of 276.25% against the S&P 500's 19.89%. However, these returns do not mitigate the concern over its current valuation metrics, reinforcing the conclusion that AppLovin Corp. is overvalued.