AppLovin (APP) AI Stock Analysis

• Market Cap: $219.72B
• Dividend Yield: N/A
• Average Volume (3M): 8.66M
• Price to Earnings (P/E): 96.5
• Beta (1Y): 3.23
• Revenue Growth: 34.33%
• EPS Growth: 180.24%
• Country: US
• Employees: 1,533
• Sector: Communication Services
• Sector Strength: 97
• Industry: Software - Application
• EPS (TTM): 2.39
• Shares Outstanding: 307,636,380
• 10 Day Avg. Volume: 15,075,531
• 30 Day Avg. Volume: 8,659,340
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.56
• Enterprise Value/Revenue: 22.98
• Enterprise Value/Gross Profit: 28.42
• Enterprise Value/Ebitda: 39.22
• 1Y Price Target: $553.44
• Price Target Upside: -14.80% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

• Rating: 79 Outperform
• Price Target: $502.00 ▼(-22.72% Downside)

AppLovin's overall stock score is driven by strong financial performance and a positive outlook from the latest earnings call. The company's robust cash flow and profitability metrics provide a solid foundation, while technical indicators support a bullish trend. However, the high P/E ratio suggests a potential overvaluation risk.

Positive Factors

Revenue Growth

Strong revenue growth indicates effective market penetration and product adoption, supporting long-term business expansion and competitive positioning.

Cash Flow Generation

Robust cash flow generation enhances financial flexibility, allowing for strategic investments and debt management, underpinning sustainable growth.

Strategic Focus Shift

Divesting non-core assets allows AppLovin to concentrate resources on its advertising platform, potentially improving operational efficiency and market focus.

Negative Factors

High Leverage

High leverage can strain financial resources and limit flexibility, posing risks to long-term stability if not managed effectively.

Limited E-commerce Onboarding

Delays in onboarding new e-commerce clients could slow revenue diversification and growth in the short to medium term, impacting market expansion.

User Acquisition Challenges

Challenges in user acquisition post-lawsuit highlight potential vulnerabilities in adapting to industry changes, affecting growth in user base and revenue.

AppLovin Business Overview & Revenue Model

Company Description

AppLovin Corporation engages in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; Adjust, an analytics platform that helps marketers grow their mobile apps with solutions for measuring, optimizing campaigns, and protecting user data; and MAX, an in-app bidding software that optimizes the value of an app's advertising inventory by running a real-time competitive auction. Its business clients include various advertisers, publishers, internet platforms, and others. The company was incorporated in 2011 and is headquartered in Palo Alto, California.

How the Company Makes Money

AppLovin generates revenue primarily through its advertising platform, offering solutions for both performance-based and brand advertising. The company earns money by facilitating ad placements within mobile applications, where it charges advertisers based on impressions, clicks, or installs generated through its network. Key revenue streams include programmatic advertising and direct deals with advertisers, allowing for dynamic pricing based on market demand. Additionally, AppLovin's SDK provides valuable analytical insights and marketing capabilities to app developers, which can be monetized through subscriptions or usage fees. Significant partnerships with major advertisers and app developers enhance its market reach and revenue potential, driving further growth in its earnings.

AppLovin Financial Statement Overview

Summary

AppLovin demonstrates strong financial performance with impressive revenue growth and profit margins, supported by robust cash flow generation. High profitability and cash flow stability position the company well for growth, although the high leverage poses a risk if market conditions deteriorate.

Income Statement

AppLovin has demonstrated strong revenue growth with a Revenue Growth Rate of 9.03% TTM and significant improvements in profitability. The Gross Profit Margin is robust at 77.41% TTM, and the Net Profit Margin is impressive at 37.38% TTM, reflecting efficient cost management and strong pricing power. The EBIT Margin of 42.86% TTM and EBITDA Margin of 51.23% TTM also highlight operational efficiency. However, historical profitability volatility and past net losses are points of concern.

Balance Sheet

The balance sheet shows a moderate level of leverage, with a Debt-to-Equity Ratio of 6.45 TTM, indicating significant reliance on debt financing. The Return on Equity (ROE) is high at 333.74% TTM, driven by strong net income, though this is partly due to low equity levels. The Equity Ratio of 10.09% TTM indicates that only a small portion of assets is funded by equity, which represents a potential risk during downturns. Overall, while profitability is strong, high leverage is a concern.

Cash Flow

Operating cash flow is strong, with a high Operating Cash Flow to Net Income Ratio of 1.32 TTM, indicating efficient conversion of income into cash. The Free Cash Flow to Net Income Ratio also highlights robust cash generation at 1.32 TTM. Free Cash Flow Growth Rate is significant at 20.95% TTM, reflecting healthy cash flow improvements. The cash flow stability and growth are major strengths, supporting high liquidity and financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.31B	4.71B	3.28B	2.82B	2.79B	1.45B
Gross Profit	4.30B	3.54B	2.22B	1.56B	1.81B	895.51M
EBITDA	3.11B	2.34B	1.15B	513.77M	580.54M	197.12M
Net Income	2.43B	1.58B	356.71M	-192.75M	35.45M	-125.19M
Balance Sheet
Total Assets	5.96B	5.87B	5.36B	5.85B	6.16B	2.15B
Cash, Cash Equivalents and Short-Term Investments	1.19B	741.41M	502.15M	1.08B	1.52B	317.24M
Total Debt	3.51B	3.56B	3.18B	3.28B	3.33B	1.70B
Total Liabilities	4.79B	4.78B	4.10B	3.95B	4.03B	2.31B
Stockholders Equity	1.17B	1.09B	1.26B	1.90B	2.14B	-158.54M
Cash Flow
Free Cash Flow	2.85B	2.09B	1.06B	412.11M	360.46M	219.64M
Operating Cash Flow	2.86B	2.10B	1.06B	412.77M	361.85M	222.88M
Investing Cash Flow	416.50M	-106.75M	-77.83M	-1.37B	-1.21B	-679.89M
Financing Cash Flow	-2.50B	-1.75B	-1.56B	-526.85M	3.11B	377.86M

AppLovin Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 649.59
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APP, the sentiment is Positive. The current price of 649.59 is above the 20-day moving average (MA) of 542.42, above the 50-day MA of 454.82, and above the 200-day MA of 365.56, indicating a bullish trend. The MACD of 53.85 indicates Negative momentum. The RSI at 83.77 is Negative, neither overbought nor oversold. The STOCH value of 90.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APP.

AppLovin Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
APP	79 Outperform	$219.72B	96.50	240.30%	―	34.33%	180.24%
SRAD	77 Outperform	9.24B	73.83	3.69%	―	20.14%	335.82%
GTLB	69 Neutral	8.25B	-1,472.62	-0.82%	―	28.97%	98.96%
U	63 Neutral	19.40B	-43.12	-13.61%	―	-13.74%	48.10%
SPT	62 Neutral	843.40M	-15.10	-37.20%	―	14.79%	27.52%
TTD	59 Neutral	22.56B	55.64	15.48%	―	23.18%	63.48%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

AppLovin Corporate Events

AppLovin Finalizes Strategic Transaction with Tripledot

On June 30, 2025, AppLovin Corporation finalized a significant transaction with Tripledot, amending a previous Purchase Agreement from May 7, 2025. The amendment allowed for cash payment instead of a secured promissory note to fund part of the purchase. At the closing, AppLovin transferred equity interests of its mobile gaming subsidiaries to Tripledot for $400 million in cash and equity shares representing about 20% of Tripledot’s fully-diluted equity capitalization. This transaction marks a strategic shift in AppLovin’s operations, potentially impacting its market positioning and stakeholder interests.