Is Rapid7, Inc. overvalued or undervalued?

As of 22 August 2025, the valuation grade for Rapid7, Inc. has moved from attractive to very attractive, indicating a stronger position in the market. The company appears to be undervalued, especially when considering its PEG ratio of 0.38, which suggests significant growth potential relative to its price, alongside a P/E ratio of 52 and an EV to EBITDA of 26.84.
In comparison with peers, Rapid7's P/E ratio is lower than Pegasystems, Inc. at 48.13 and Wix.com Ltd. at 49.44, while its EV to EBITDA is more favorable than both Pegasystems and AppFolio, which have ratios of 31.74 and 62.77, respectively. Despite the valuation metrics indicating an attractive opportunity, the company's stock has significantly underperformed against the S&P 500, with a year-to-date return of -49.84% compared to the index's 12.22%.