Is Rapid7, Inc. overvalued or undervalued?

As of 28 March 2025, Rapid7, Inc. has moved from a fair to attractive valuation grade. The company appears to be undervalued, with a P/E ratio of 52, which is higher than the industry average, but its PEG ratio of 0.38 suggests strong growth potential relative to its price. Additionally, the EV to EBITDA ratio stands at 26.84, indicating that the market may not be fully recognizing the company's earnings potential.
In comparison to peers, Rapid7's P/E ratio is significantly higher than Box, Inc., which has a P/E of 22.48, while Workiva, Inc. is in a risky position with a negative P/E. Despite its attractive valuation grade, Rapid7's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -42.28% compared to the index's 2.44%. Overall, the combination of strong ratios and growth potential suggests that Rapid7 is undervalued in the current market.