NASDAQ:APP is not too expensive for the growth it is showing.

Last update: May 13, 2024

Discover APPLOVIN CORP-CLASS A (NASDAQ:APP), an undervalued growth gem identified by our stock screener. NASDAQ:APP is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Assessing Growth for NASDAQ:APP

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:APP has earned a 7 for growth:

The Earnings Per Share has grown by an impressive 863.64% over the past year.
APP shows a strong growth in Revenue. In the last year, the Revenue has grown by 24.73%.
APP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 46.69% yearly.
The Earnings Per Share is expected to grow by 32.41% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 9.04% on average over the next years. This is quite good.

What does the Valuation looks like for NASDAQ:APP

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:APP has earned a 6 for valuation:

Compared to the rest of the industry, the Price/Earnings ratio of APP indicates a somewhat cheap valuation: APP is cheaper than 63.41% of the companies listed in the same industry.
Based on the Price/Forward Earnings ratio, APP is valued a bit cheaper than the industry average as 71.38% of the companies are valued more expensively.
Based on the Enterprise Value to EBITDA ratio, APP is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, APP is valued cheaply inside the industry as 80.80% of the companies are valued more expensively.
APP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
APP has a very decent profitability rating, which may justify a higher PE ratio.
APP's earnings are expected to grow with 59.00% in the coming years. This may justify a more expensive valuation.

Understanding NASDAQ:APP's Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:APP, the assigned 7 reflects its health status:

APP has an Altman-Z score of 5.12. This indicates that APP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of APP (5.12) is better than 72.83% of its industry peers.
APP has a debt to FCF ratio of 3.03. This is a good value and a sign of high solvency as APP would need 3.03 years to pay back of all of its debts.
The Debt to FCF ratio of APP (3.03) is better than 66.67% of its industry peers.
APP has a Current Ratio of 2.11. This indicates that APP is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of APP (2.11) is better than 61.96% of its industry peers.
A Quick Ratio of 2.11 indicates that APP has no problem at all paying its short term obligations.
APP has a Quick ratio of 2.11. This is in the better half of the industry: APP outperforms 62.68% of its industry peers.

Profitability Insights: NASDAQ:APP

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:APP was assigned a score of 6 for profitability:

Looking at the Return On Assets, with a value of 11.29%, APP belongs to the top of the industry, outperforming 91.30% of the companies in the same industry.
APP has a better Return On Equity (78.16%) than 98.19% of its industry peers.
APP has a Return On Invested Capital of 16.75%. This is amongst the best in the industry. APP outperforms 94.20% of its industry peers.
The 3 year average ROIC (4.97%) for APP is below the current ROIC(16.75%), indicating increased profibility in the last year.
APP has a Profit Margin of 16.39%. This is amongst the best in the industry. APP outperforms 86.23% of its industry peers.
APP has a Operating Margin of 26.32%. This is amongst the best in the industry. APP outperforms 94.93% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of APP

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.