Is Rapid7, Inc. overvalued or undervalued?

As of 17 October 2025, Rapid7, Inc. has moved from a fair to very attractive valuation grade. The company appears to be undervalued, especially given its PEG ratio of 0.38, which suggests strong growth potential relative to its price, and a P/E ratio of 52, which is competitive against peers like Pegasystems, Inc. at 48.13 and Wix.com Ltd. at 49.44. Additionally, the EV to EBITDA ratio stands at 26.84, indicating a reasonable valuation compared to the industry standards.
In comparison to its peers, Rapid7's valuation metrics suggest it is positioned favorably, particularly with a ROE of 56.30%, which is significantly higher than the industry average. However, the company has faced substantial declines in stock performance, with a year-to-date return of -55.33% compared to the S&P 500's 13.30%, highlighting a stark contrast in performance that may not yet be reflected in its valuation.