Yes, basically, but to be pedantic, valuations do not mean revert; they cycle about the mean.

Actually I meant mean reversion in the boring pedantic mathematical sense. At any given time, a change towards the (roughly speaking) central zone of possible values is more likely than a change away from it. Either might happen, but not with equal probabilities, which would be a random walk. Since either direction might happen at any given time, it's not cyclical, a much stronger hypothesis, but merely mean reverting.

When things are extreme in one direction, you're more likely to see a move towards the less extreme than towards the more extreme.

The average over a given time interval might not (probably won't) be the same as in the next time interval, but that's more of a quibble in the grand scheme of things. If you know that you're definitely really far from the usual zone, you know which direction is the more likely one.

Jim