AppLovin (APP) AI Stock Analysis

• Market Cap: $157.48B
• Dividend Yield: N/A
• Average Volume (3M): 5.31M
• Price to Earnings (P/E): 69.2
• Beta (1Y): 3.15
• Revenue Growth: 34.33%
• EPS Growth: 180.24%
• Country: US
• Employees: 1,533
• Sector: Communication Services
• Sector Strength: 93
• Industry: Software - Application
• EPS (TTM): 2.39
• Shares Outstanding: 307,636,380
• 10 Day Avg. Volume: 7,706,385
• 30 Day Avg. Volume: 5,311,524
• PEG Ratio: 0.19
• Price to Book (P/B): 100.11
• Price to Sales (P/S): 23.17
• P/FCF Ratio: 52.10
• Enterprise Value/Market Cap: 0.78
• Enterprise Value/Revenue: 23.78
• Enterprise Value/Gross Profit: 30.60
• Enterprise Value/Ebitda: 46.27
• 1Y Price Target: $524.78
• Price Target Upside: 12.37% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 78 Outperform
• Price Target: $499.00 ▲(6.85% Upside)

AppLovin's strong financial performance and positive earnings call are the most significant factors driving the score. The company's robust revenue growth, high profitability, and strategic shifts position it well for future growth. However, high leverage and valuation concerns, along with technical indicators suggesting potential overbought conditions, present risks that temper the overall score.

Positive Factors

Financial Performance

APP's revenue and adjusted EBITDA both exceeded management’s guidance, indicating strong financial performance.

Market Position

Feedback suggests APP maintained or increased their leadership position in gaming this quarter, outgrowing peers in an improving market backdrop.

Product Launch

The company plans to launch its web advertising self-service portal, Axon Ads Manager, which is expected to simplify onboarding and expand access to non-gaming advertisers.

Negative Factors

Macroeconomic Environment

Risk exists that shares could underperform in a weaker macroeconomic environment due to APP's e-commerce exposure and less advertiser breadth compared to larger ad platforms.

Market Risks

There is uncertainty regarding APP's ability to scale meaningfully beyond gaming, which presents potential risks.

Revenue Concerns

Bullish investors will be disappointed with commentary indicating flattish eCommerce revenue in Q3.

AppLovin Business Overview & Revenue Model

Company Description

AppLovin 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 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 shows strong financial performance with impressive revenue 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	5.14B	4.71B	3.28B	2.82B	2.79B	1.45B
Gross Profit	3.99B	3.54B	2.22B	1.56B	1.81B	895.51M
EBITDA	2.64B	2.34B	1.15B	513.77M	580.54M	197.12M
Net Income	1.92B	1.58B	356.71M	-192.75M	35.45M	-125.19M
Balance Sheet
Total Assets	5.71B	5.87B	5.36B	5.85B	6.16B	2.15B
Cash, Cash Equivalents and Short-Term Investments	551.02M	741.41M	502.15M	1.08B	1.52B	317.24M
Total Debt	3.71B	3.56B	3.18B	3.28B	3.33B	1.70B
Total Liabilities	5.13B	4.78B	4.10B	3.95B	4.03B	2.31B
Stockholders Equity	575.42M	1.09B	1.26B	1.90B	2.14B	-158.54M
Cash Flow
Free Cash Flow	2.53B	2.09B	1.06B	412.11M	360.46M	219.64M
Operating Cash Flow	2.54B	2.10B	1.06B	412.77M	361.85M	222.88M
Investing Cash Flow	-97.78M	-106.75M	-77.83M	-1.37B	-1.21B	-679.89M
Financing Cash Flow	-2.33B	-1.75B	-1.56B	-526.85M	3.11B	377.86M

AppLovin Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 467.00
• 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 467 is above the 20-day moving average (MA) of 387.06, above the 50-day MA of 371.77, and above the 200-day MA of 329.30, indicating a bullish trend. The MACD of 25.12 indicates Negative momentum. The RSI at 74.31 is Negative, neither overbought nor oversold. The STOCH value of 92.75 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
NOW	79 Outperform	$177.51B	107.42	16.95%	―	21.12%	43.91%
APP	78 Outperform	$157.48B	69.17	240.30%	―	34.33%	180.24%
DDOG	75 Outperform	$44.97B	372.61	4.45%	―	26.00%	-25.64%
TTD	69 Neutral	$26.05B	64.23	16.36%	―	23.18%	63.48%
GWRE	68 Neutral	$17.59B	530.50	2.61%	―	18.61%	―
SNOW	64 Neutral	$64.42B	―	-40.16%	―	27.50%	-49.96%
Sector *	60 Neutral	$43.99B	4.18	-7.47%	4.06%	2.47%	-40.32%

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.

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.

AppLovin Approves Directors and Accounting Firm at Meeting

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.