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AppLovin (APP)
NASDAQ:APP
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AppLovin
(NASDAQ:APP)
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Rating:73Outperform
Price Target:
$620.00
▲(10.75% Upside)
AppLovin's overall stock score is driven by strong financial performance and positive earnings call guidance. The company's high profitability and robust cash flow generation are significant strengths. However, technical analysis indicates potential bearish momentum, and the high P/E ratio suggests overvaluation. The absence of a dividend yield also affects the valuation score.
Positive Factors
Revenue Growth
The significant year-over-year revenue growth indicates strong demand and effective business model updates, enhancing long-term financial stability.
Cash Flow Generation
Robust cash flow growth supports liquidity and operational flexibility, enabling strategic investments and shareholder returns.
S&P 500 Inclusion
Inclusion in the S&P 500 enhances the company's credibility and visibility, potentially attracting more investors and strategic opportunities.
Negative Factors
High Leverage
Significant leverage can pose financial risks, limiting flexibility and increasing vulnerability to interest rate changes or economic downturns.
EU Market Expansion Challenges
Regulatory hurdles in the EU market could delay growth and limit international expansion, impacting long-term revenue potential.
Competitive Pressure
Intense competition in monetization could pressure margins and require continuous innovation to maintain market position.
AppLovin (APP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$175.82B
Dividend YieldN/A
Average Volume (3M)4.47M
Price to Earnings (P/E)65.6
Beta (1Y)3.54
Revenue Growth28.69%
EPS Growth134.97%
CountryUS
Employees1,533
SectorCommunication Services
Sector Strength97
IndustrySoftware - Application
Share Statistics
EPS (TTM)2.45
Shares Outstanding307,597,000
10 Day Avg. Volume4,822,921
30 Day Avg. Volume4,465,265
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)100.11
Price to Sales (P/S)23.17
P/FCF Ratio52.10
Enterprise Value/Market Cap1.40
Enterprise Value/Revenue44.71
Enterprise Value/Gross Profit53.67
Enterprise Value/Ebitda68.99
Forecast
1Y Price Target
$749.28Price Target Upside33.85% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
EPS Forecast (FY)9.38
Revenue Forecast (FY)$5.69B
AppLovin Business Overview & Revenue Model
Company DescriptionAppLovin (APP) is a technology company that operates in the mobile app ecosystem, focusing primarily on app monetization and user acquisition solutions. Founded in 2012, AppLovin provides comprehensive tools and services for developers to grow and monetize their applications. The company operates in two main segments: its advertising platform, which helps app developers monetize their apps through targeted ads, and its software development kit (SDK), which offers analytics and marketing tools to optimize app performance. AppLovin has a diverse portfolio of owned and operated apps, alongside a robust marketplace for app developers and advertisers.
How the Company Makes MoneyAppLovin 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 Key Performance Indicators (KPIs)
Any
Monthly Active Payers
Measures the number of users making payments each month, indicating the level of user engagement and monetization success within the platform.
Measures the number of users making payments each month, indicating the level of user engagement and monetization success within the platform.
Data provided by:
Main Street Data
Main Street DataAppLovin Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 18, 2026
Earnings Call Sentiment Positive
The earnings call highlights a very strong financial performance with significant revenue and EBITDA growth, successful product launches, and strategic milestones like S&P 500 inclusion. However, there are challenges in expanding the EU market and potential demand constraints that need to be addressed. Overall, the positive aspects significantly outweigh the challenges.Q3-2025 Updates
Positive Updates
Record-Breaking Revenue Growth
Q3 revenue was approximately $1.405 billion, up 68% year-over-year, driven by model updates in the core gaming business.
Strong EBITDA and Cash Flow
Adjusted EBITDA was $1.158 billion, up 79% with an 82% margin, and free cash flow was $1.049 billion, up 92% year-over-year.
S&P 500 Inclusion
AppLovin was included in the S&P 500, marking a significant milestone and recognition of the company's growth and platform reach.
Successful Launch of Self-Service Platform
The self-service platform launched without significant issues, with early growth in advertiser spend at approximately 50% week-over-week.
International Expansion
Opened up international traffic for advertisers promoting websites or shops, expanding the reach of the platform.
Negative Updates
Challenges with EU Market Expansion
The platform has not yet opened EU traffic for web shops and web advertisers due to GDPR and other regulatory requirements.
Potential Demand Constraints
While the company is not currently supply-constrained, there is an acknowledgment that demand density is needed for ongoing growth.
Competitive Pressure in Monetization
The company faces pressure to continually improve monetization tools and compete in a mature in-app purchasing market.
Company Guidance
During the AppLovin earnings call for Q3 2025, the company provided robust guidance for the upcoming quarter and beyond. Revenue for Q3 was reported at approximately $1.405 billion, marking a year-over-year increase of 68%, driven by model updates in the core gaming business. The adjusted EBITDA reached $1.158 billion, reflecting a 79% increase at an 82% margin. Free cash flow was reported at $1.049 billion, up 92% from the previous year. The company ended the quarter with $1.7 billion in cash and cash equivalents and repurchased approximately 1.3 million shares for $571 million using free cash flow. The Board of Directors also increased the share repurchase authorization by an additional $3.2 billion. Looking ahead, AppLovin anticipates Q4 revenue between $1.570 billion and $1.6 billion, with an adjusted EBITDA between $1.290 billion and $1.320 billion, targeting a margin of 82% to 83%. The company is optimistic about its self-service platform, noting early growth in spend from self-service advertisers at roughly 50% week-over-week, and plans to continue refining its onboarding processes and testing AI-based ad creatives to further enhance user response rates.AppLovin Financial Statement Overview
Summary
AppLovin demonstrates strong financial health with high profitability and robust cash flow generation. The income statement shows strong profitability with high margins, although revenue growth has slowed. The balance sheet indicates significant leverage, but high returns on equity mitigate some risks. Cash flow is strong, supporting liquidity and operational flexibility.Income Statement
AppLovin's income statement shows strong profitability with a TTM gross profit margin of 83.31% and a net profit margin of 51.28%, indicating efficient cost management and high profitability. The revenue growth rate of 3.89% TTM suggests steady growth, although it has slowed compared to previous years. The EBIT and EBITDA margins are robust at 59.57% and 64.18% respectively, reflecting strong operational performance.85
Very Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 2.38 TTM, indicating significant leverage, which could pose a risk if not managed carefully. However, the return on equity is impressive at 262.94% TTM, suggesting effective use of equity to generate profits. The equity ratio stands at 23.23% TTM, indicating a moderate level of equity financing.70
Positive
Cash Flow
AppLovin's cash flow statement is strong, with a free cash flow growth rate of 17.77% TTM, indicating healthy cash generation. The operating cash flow to net income ratio of 3.13 TTM and free cash flow to net income ratio of 0.99 TTM suggest efficient conversion of income into cash, supporting liquidity and operational flexibility.88
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.52B | 4.71B | 3.28B | 2.82B | 2.79B | 1.45B |
| Gross Profit | 4.60B | 3.54B | 2.22B | 1.56B | 1.81B | 895.51M |
| EBITDA | 3.58B | 2.34B | 1.15B | 513.77M | 580.54M | 197.12M |
| Net Income | 2.83B | 1.58B | 356.71M | -192.75M | 35.45M | -125.19M |
Balance Sheet | ||||||
| Total Assets | 6.34B | 5.87B | 5.36B | 5.85B | 6.16B | 2.15B |
| Cash, Cash Equivalents and Short-Term Investments | 1.67B | 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 | 4.87B | 4.78B | 4.10B | 3.95B | 4.03B | 2.31B |
| Stockholders Equity | 1.47B | 1.09B | 1.26B | 1.90B | 2.14B | -158.54M |
Cash Flow | ||||||
| Free Cash Flow | 3.35B | 2.09B | 1.06B | 412.11M | 360.46M | 219.64M |
| Operating Cash Flow | 3.36B | 2.10B | 1.06B | 412.77M | 361.85M | 222.88M |
| Investing Cash Flow | 358.89M | -106.75M | -77.83M | -1.37B | -1.21B | -679.89M |
| Financing Cash Flow | -2.62B | -1.75B | -1.56B | -526.85M | 3.11B | 377.86M |
AppLovin Technical Analysis
Positive
559.80
Price Trends
610.56
Negative
518.68
Positive
424.44
Positive
Market Momentum
-19.97
Positive
45.78
Neutral
27.52
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 559.8 is below the 20-day moving average (MA) of 587.81, below the 50-day MA of 610.56, and above the 200-day MA of 424.44, indicating a neutral trend. The MACD of -19.97 indicates Positive momentum. The RSI at 45.78 is Neutral, neither overbought nor oversold. The STOCH value of 27.52 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 49 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $175.82B | 65.57 | 230.71% | ― | 28.69% | 134.97% | |
70 Outperform | $18.89B | 44.56 | 16.78% | ― | 20.82% | 41.82% | |
67 Neutral | $6.73B | 61.16 | 9.79% | ― | 18.99% | 66.43% | |
64 Neutral | $16.59B | ― | -13.64% | ― | -8.23% | 48.57% | |
61 Neutral | $577.29M | ― | -26.69% | ― | 13.09% | 32.34% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
60 Neutral | $433.71M | ― | -1.56% | ― | -28.29% | -126.12% |
* Communication Services Sector Average
APP
AppLovin
559.80
240.21
75.16%
PERI
Perion Network
9.77
1.22
14.27%
TTD
Trade Desk
39.06
-90.29
-69.80%
SPT
Sprout Social
9.93
-22.96
-69.81%
U
Unity Software
41.59
17.57
73.15%
SRAD
Sportradar Group AG
21.52
3.87
21.93%
AppLovin Corporate Events
AppLovin Corp. Shines in Earnings Call with Strong Growth
Nov 7, 2025
AppLovin Corp. Reports Strong Earnings Amidst Growth and Challenges
AppLovin Corp. Reports Strong Q3 2025 Financial Growth
Nov 6, 2025
AppLovin Corporation is a prominent marketing platform that provides end-to-end software and AI solutions for businesses to connect with their ideal customers, primarily operating in the technology sector.
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.