Is DigitalOcean Holdings, Inc. overvalued or undervalued?

As of 6 May 2021, the valuation grade for DigitalOcean Holdings, Inc. moved from does not qualify to risky, indicating increased concerns regarding its valuation. The company appears to be overvalued based on several key metrics, including a P/E ratio of 24, an EV to EBITDA ratio of 15.65, and a PEG ratio of 0.23, which suggests that the stock may not be justified at its current price level given its growth prospects.
In comparison to its peers, DigitalOcean's P/E ratio of 23.94 is notably higher than HashiCorp, Inc. which has a P/E of -56.15, and Envestnet, Inc. at 85.75, highlighting a divergence in valuation despite the risky classification across the board. Additionally, the company's recent performance shows a 1-month return of 17.38%, outperforming the S&P 500's 2.33%, but a 1-year return of -8.75% significantly lags behind the S&P 500's 17.14%, reinforcing the notion of overvaluation.