AppLovin (APP) AI Stock Analysis

• Market Cap: $134.85B
• Dividend Yield: N/A
• Average Volume (3M): 6.64M
• Price to Earnings (P/E): 75.2
• Beta (1Y): 3.15
• Revenue Growth: 41.63%
• EPS Growth: 224.65%
• Country: US
• Employees: 1,533
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Application
• EPS (TTM): 1.67
• Shares Outstanding: 307,698,330
• 10 Day Avg. Volume: 5,651,555
• 30 Day Avg. Volume: 6,639,755
• PEG Ratio: 1.91
• Price to Book (P/B): 102.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 52.92
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 6.85
• Enterprise Value/Gross Profit: 32.39
• Enterprise Value/Ebitda: 15.43
• 1Y Price Target: $500.94
• Price Target Upside: 20.27% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19

• Rating: 80 Outperform
• Price Target: $479.00 ▲(15.00%Upside)

AppLovin's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting robust revenue and profit margins. While technical indicators show a bullish trend, valuation concerns due to high P/E ratio and overbought signals are potential risks. The company's strategic focus on advertising and machine learning advancements position it well for future growth, despite challenges like high leverage and potential tariff impacts.

Positive Factors

Advertising Performance

AppLovin beat Q1 expectations with revenue of $1.48B vs consensus of $1.38B and AEBITDA of $1.01B vs $875M.

Analyst Rating

The analyst maintains an OUTPERFORM rating for AppLovin with a price target of $620.

Revenue Growth

AppLovin's ad revenue growth of 71% year-over-year is highly impressive, indicating strong potential for future growth.

Negative Factors

Business Sale

Consolidated Revenue estimates move lower due to the sale of the mobile games business.

Guidance Caution

Management sounded somewhat cautious on 2Q25 guidance, citing the temporary slowdown in web merchant onboarding.

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 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 Financial Statement Overview

Summary

AppLovin demonstrates solid financial performance characterized by strong revenue and profit growth, improving profitability margins, and robust cash flows. While leverage remains high, posing a risk, the significant improvement in equity and cash flow metrics is promising. The company is well-positioned in the software industry with a trajectory of growth and efficiency, though careful management of debt levels will be crucial.

Income Statement

AppLovin has shown strong growth with a consistent increase in total revenue over the years, reaching $4.71 billion in 2024 from $0.99 billion in 2019. The gross profit margin has remained robust, reflecting efficient cost management. Net profit margins improved significantly from losses in earlier years to a positive 33.55% in 2024, indicating enhanced profitability. EBIT and EBITDA margins are also solid, with EBIT margin at 39.78% and EBITDA margin at 39.78% for 2024, showcasing operational efficiency. The revenue growth rate from 2023 to 2024 was impressive at 43.43%.

Balance Sheet

The balance sheet shows moderate improvement, with stockholders' equity rebounding to $1.09 billion in 2024 from negative values pre-2021. The debt-to-equity ratio remains high at 3.26, indicating significant leverage, but the equity ratio improved to 18.57%, reflecting a better balance between equity and assets. Return on equity (ROE) surged to 144.99% in 2024, driven by high net income, but high leverage poses a risk.

Cash Flow

AppLovin's cash flow performance is strong, with a substantial increase in operating cash flow and free cash flow over the years. The free cash flow growth rate from 2023 to 2024 was an impressive 98.09%. The operating cash flow to net income ratio is favorable at 1.33, indicating efficient cash generation relative to earnings. Free cash flow to net income ratio is robust at 1.33, highlighting strong cash flow support for earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.71B	3.28B	2.82B	2.79B	1.45B
	Gross Profit
3.54B	2.22B	1.56B	1.81B	895.51M
	EBIT
1.87B	648.21M	-8.65M	150.02M	24.84M
	EBITDA
2.32B	1.15B	513.77M	597.74M	186.79M
	Net Income Common Stockholders
1.58B	356.71M	-217.41M	35.45M	-125.93M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
741.41M	502.15M	1.08B	1.52B	317.24M
	Total Assets
5.87B	5.36B	5.85B	6.16B	2.15B
	Total Debt
3.56B	3.18B	3.30B	3.31B	1.69B
	Net Debt
2.81B	2.68B	2.22B	1.79B	1.38B
	Total Liabilities
4.78B	4.10B	3.95B	4.03B	2.31B
	Stockholders Equity
1.09B	1.26B	1.90B	2.14B	-158.54M
Cash Flow		Free Cash Flow
2.09B	1.06B	406.16M	356.39M	219.64M
	Operating Cash Flow
2.10B	1.06B	412.77M	361.85M	222.88M
	Investing Cash Flow
-106.75M	-77.83M	-1.37B	-1.21B	-679.89M
	Financing Cash Flow
-1.75B	-1.56B	-526.85M	3.11B	377.86M

AppLovin Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 416.52
• 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 416.52 is above the 20-day moving average (MA) of 373.44, above the 50-day MA of 309.18, and above the 200-day MA of 271.58, indicating a bullish trend. The MACD of 27.60 indicates Negative momentum. The RSI at 70.16 is Negative, neither overbought nor oversold. The STOCH value of 89.36 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	80 Outperform	$134.85B	75.21	287.44%	―	41.63%	224.65%
TTD	77 Outperform	$36.56B	93.00	16.88%	―	25.07%	103.30%
NOW	75 Outperform	$209.41B	137.48	16.86%	―	21.01%	-20.93%
SNOW	74 Outperform	$69.79B	―	-40.16%	―	27.50%	-49.96%
DDOG	73 Outperform	$40.98B	259.32	6.48%	―	25.54%	40.02%
Sector *	62 Neutral	$11.75B	10.58	-7.10%	2.91%	7.47%	-7.95%
GWRE	59 Neutral	$18.30B	644.95	2.61%	―	18.61%	―

AppLovin Corporate Events

AppLovin Sells Mobile Gaming Business to Tripledot

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.

AppLovin Appoints Maynard Webb to Board of Directors

On April 9, 2025, AppLovin Corporation announced the appointment of Maynard Webb to its Board of Directors, where he will also serve on the Audit Committee and Nominating and Corporate Governance Committee. Webb, a seasoned executive with extensive experience in technology and venture capital, is expected to bring valuable insights to AppLovin’s strategic direction. Additionally, Edward Oberwager, a current board member, notified the company on April 8, 2025, that he will not stand for re-election at the upcoming 2025 Annual Meeting of Stockholders, although his decision was not due to any disagreements with the company.