tiprankstipranks
Trending News
More News >
AppLovin (APP)
NASDAQ:APP
Advertisement

AppLovin (APP) AI Stock Analysis

Compare
5,345 Followers

Top Page

APP

AppLovin

(NASDAQ:APP)

Rating:72Outperform
Price Target:
$374.00
▲(3.28%Upside)
AppLovin's robust financial performance and strategic focus on advertising, as highlighted in the earnings call, are major strengths. However, high leverage and valuation concerns, coupled with mixed technical indicators, temper the overall stock score.
Positive Factors
Advertising Platform
AppLovin's high-margin Advertising Platform is now the dominant revenue source, simplifying the business model and concentrating strategic focus.
Market Leadership
AppLovin maintained or increased their leadership position in gaming with feedback suggesting APP outgrew peers across an improving market backdrop.
Negative Factors
Competitive Concerns
Increased scrutiny is anticipated on 3Q guidance, particularly with Unity's newly launched AI-powered ad platform potentially affecting competitive dynamics.
Growth Slowdown
This marks the third sequential slowdown in growth in new brand additions since the tracker started in March.

AppLovin (APP) vs. SPDR S&P 500 ETF (SPY)

AppLovin Business Overview & Revenue Model

Company DescriptionAppLovin Corporation is a leading mobile technology company headquartered in Palo Alto, California. It operates within the mobile application ecosystem, focusing on app development and advertising solutions. AppLovin provides developers with a comprehensive suite of tools for user acquisition, monetization, and analytics, helping them optimize and scale their applications across various platforms. The company's core products include its AppDiscovery marketing platform, MAX mediation, and various in-app monetization solutions.
How the Company Makes MoneyAppLovin makes money primarily through its advertising and marketing services. The company generates revenue by providing app developers with tools to monetize their apps through in-app advertising and purchases. AppLovin's AppDiscovery platform enables targeted user acquisition campaigns, where advertisers pay the company for promoting their apps to potential users. Additionally, the MAX mediation platform helps developers optimize ad revenue by managing and maximizing fill rates and eCPMs across multiple ad networks. AppLovin also earns from in-app purchases made within its portfolio of owned and operated mobile games, further diversifying its revenue streams. The company has established significant partnerships with major ad networks and app developers, enhancing its ability to drive revenue growth through an expansive ecosystem.

AppLovin Key Performance Indicators (KPIs)

Any
Any
Monthly Active Payers
Monthly Active Payers
Measures the number of users making payments each month, indicating the level of user engagement and monetization success within the platform.
Chart InsightsAppLovin's Monthly Active Payers have been on a declining trend since 2021, stabilizing somewhat in recent quarters but still showing a decrease. This aligns with the company's strategic pivot away from its games business, as highlighted in the latest earnings call. The sale of the games division to Tripledot Studios allows AppLovin to concentrate on its Advertising segment, which is expected to drive revenue growth through machine learning and AI advancements. While this shift may initially impact payer metrics, it positions the company for stronger performance in its core advertising operations.
Data provided by:Main Street Data

AppLovin Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 19.33%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance for AppLovin in Q1 2025, with record revenue growth and successful strategic initiatives such as the sale of the games business. The company demonstrated resilience in overcoming seasonal challenges and is poised for further growth through advancements in machine learning and AI. However, there are areas of concern, such as limited penetration in web advertising and potential impacts from tariff changes. Despite these challenges, the positive highlights outweigh the lowlights.
Q1-2025 Updates
Positive Updates
Record Revenue Growth
Total revenue increased by 40% year-over-year to $1.5 billion for Q1 2025, with adjusted EBITDA rising 83% to $1 billion, achieving a 68% adjusted EBITDA margin.
Strong Free Cash Flow
Generated $826 million in free cash flow, up 113% year-over-year, with a 19% increase quarter-over-quarter.
Strategic Sale of Games Business
Signed a definitive agreement to sell the games business to Tripledot Studios for $400 million in cash and a 20% ownership stake in the combined business.
Machine Learning and AI Advancements
Continued enhancement of machine learning models to improve advertising performance, with a focus on expanding e-commerce and web advertising solutions.
High Adjusted EBITDA Margin in Advertising
Achieved 81% margin in the Advertising segment with $1.16 billion in revenue and $943 million in adjusted EBITDA.
Negative Updates
Seasonal Challenges
Q1 typically poses challenges for advertising due to seasonality, impacting potential growth.
Limited Web Advertising Penetration
Current market penetration in web advertising remains below 0.1%, indicating a significant area for growth but also current underperformance.
Potential Tariff Impacts
Concerns about the impact of de minimis tariff exemption changes on web-based advertising, though the company is positioned to manage these changes.
Company Guidance
During AppLovin's Q1 2025 earnings call, the company outlined its strategic guidance for the upcoming quarter and beyond. The company expects its Advertising business to deliver revenue between $1.195 billion and $1.215 billion, with an adjusted EBITDA range of $970 million to $990 million, maintaining an 81% margin. This forecast reflects a sequential growth of 3% to 5%, attributed to ongoing machine learning advancements and the expansion of their e-commerce and web advertising solutions. AppLovin also announced the definitive agreement to sell its games business to Tripledot Studios, which will enable a sharper focus on its Advertising segment. The company has set three key priorities for 2025: enhancing machine learning models, improving e-commerce and web advertising solutions, and developing automated ad creation tools. Despite potential macroeconomic impacts like tariffs, AppLovin remains confident in its ability to navigate changes without adversely affecting its business trajectory. The company plans to leverage its lean operational model and a robust data moat to sustain its position as a performance leader in the marketing platform space.

AppLovin Financial Statement Overview

Summary
AppLovin demonstrates strong financial performance with high revenue growth, robust profit margins, and excellent cash flow generation. However, the high leverage on the balance sheet is a concern, as it poses risks if market conditions worsen.
Income Statement
85
Very Positive
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
70
Positive
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
90
Very Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.71B3.28B2.82B2.79B1.45B
Gross Profit3.54B2.22B1.56B1.81B895.51M
EBITDA2.34B1.15B513.77M580.54M197.12M
Net Income1.58B356.71M-192.75M35.45M-125.19M
Balance Sheet
Total Assets5.87B5.36B5.85B6.16B2.15B
Cash, Cash Equivalents and Short-Term Investments741.41M502.15M1.08B1.52B317.24M
Total Debt3.56B3.18B3.28B3.33B1.70B
Total Liabilities4.78B4.10B3.95B4.03B2.31B
Stockholders Equity1.09B1.26B1.90B2.14B-158.54M
Cash Flow
Free Cash Flow2.09B1.06B412.11M360.46M219.64M
Operating Cash Flow2.10B1.06B412.77M361.85M222.88M
Investing Cash Flow-106.75M-77.83M-1.37B-1.21B-679.89M
Financing Cash Flow-1.75B-1.56B-526.85M3.11B377.86M

AppLovin Technical Analysis

Technical Analysis Sentiment
Positive
Last Price362.12
Price Trends
50DMA
363.57
Negative
100DMA
321.98
Positive
200DMA
311.57
Positive
Market Momentum
MACD
1.53
Negative
RSI
53.59
Neutral
STOCH
62.78
Neutral
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 362.12 is above the 20-day moving average (MA) of 348.96, below the 50-day MA of 363.57, and above the 200-day MA of 311.57, indicating a neutral trend. The MACD of 1.53 indicates Negative momentum. The RSI at 53.59 is Neutral, neither overbought nor oversold. The STOCH value of 62.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APP.

AppLovin Risk Analysis

AppLovin disclosed 57 risk factors in its most recent earnings report. AppLovin reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

AppLovin Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$70.92B-40.16%27.50%-49.96%
77
Outperform
$40.01B99.8816.88%25.07%103.30%
76
Outperform
$49.73B311.966.48%25.54%40.02%
74
Outperform
$198.13B120.3716.95%21.12%43.93%
72
Outperform
$118.44B63.20287.44%41.63%224.65%
70
Outperform
$18.84B568.132.61%18.61%
51
Neutral
AU$1.67B2.47-31.66%3.57%16.42%-7.36%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
APP
AppLovin
362.12
283.44
360.24%
GWRE
Guidewire
223.73
79.52
55.14%
NOW
ServiceNow
956.43
225.56
30.86%
TTD
Trade Desk
84.63
-4.69
-5.25%
DDOG
Datadog
144.00
26.68
22.74%
SNOW
Snowflake
212.56
86.94
69.21%

AppLovin Corporate Events

M&A TransactionsBusiness Operations and Strategy
AppLovin Finalizes Strategic Transaction with Tripledot
Neutral
Jul 1, 2025

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.

The most recent analyst rating on (APP) stock is a Buy with a $100.00 price target. To see the full list of analyst forecasts on AppLovin stock, see the APP Stock Forecast page.

Executive/Board ChangesShareholder Meetings
AppLovin Approves Directors and Accounting Firm at Meeting
Neutral
Jun 9, 2025

On June 4, 2025, AppLovin held its annual meeting of stockholders where two key proposals were voted on. The election of nine directors to serve until the 2026 annual meeting was approved, and the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was ratified.

The most recent analyst rating on (APP) stock is a Buy with a $100.00 price target. To see the full list of analyst forecasts on AppLovin stock, see the APP Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
AppLovin Sells Mobile Gaming Business to Tripledot
Positive
May 7, 2025

On May 7, 2025, AppLovin Corporation announced a definitive agreement to sell its mobile gaming business to Tripledot Studios for $400 million in cash and a 20% equity stake in Tripledot. The transaction, expected to close in the second quarter of 2025, aims to streamline AppLovin’s focus on its core marketing platform operations, potentially enhancing its industry positioning and financial performance. The deal includes a $150 million cash payment at closing and a $250 million promissory note, with the transaction subject to regulatory approvals and customary closing conditions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025