Despite its growth, NASDAQ:APP remains within the realm of affordability.

Last update: Jan 30, 2025

Take a closer look at APPLOVIN CORP-CLASS A (NASDAQ:APP), an affordable growth stock uncovered by our stock screener. NASDAQ:APP boasts strong growth prospects and excels in financial health indicators, all while maintaining a reasonable valuation. Let's break it down further.

Growth Assessment of NASDAQ:APP

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:APP was assigned a score of 7 for growth:

The Earnings Per Share has grown by an impressive 1000.00% over the past year.
The Revenue has grown by 41.48% in the past year. This is a very strong growth!
The Revenue has been growing by 46.69% on average over the past years. This is a very strong growth!
The Earnings Per Share is expected to grow by 32.41% on average over the next years. This is a very strong growth
Based on estimates for the next years, APP will show a quite strong growth in Revenue. The Revenue will grow by 14.27% on average per year.

Exploring NASDAQ:APP's Valuation

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 5 for valuation:

Compared to an average S&P500 Price/Forward Earnings ratio of 91.29, APP is valued a bit cheaper.
64.87% of the companies in the same industry are more expensive than APP, based on the Enterprise Value to EBITDA ratio.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of APP may justify a higher PE ratio.
A more expensive valuation may be justified as APP's earnings are expected to grow with 98.95% in the coming years.

Health Assessment of NASDAQ:APP

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:

An Altman-Z score of 18.34 indicates that APP is not in any danger for bankruptcy at the moment.
APP has a better Altman-Z score (18.34) than 91.76% of its industry peers.
APP has a debt to FCF ratio of 2.01. This is a good value and a sign of high solvency as APP would need 2.01 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.01, APP is doing good in the industry, outperforming 65.59% of the companies in the same industry.
Although APP does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
A Current Ratio of 2.41 indicates that APP has no problem at all paying its short term obligations.
The Current ratio of APP (2.41) is better than 65.95% of its industry peers.
APP has a Quick Ratio of 2.41. This indicates that APP is financially healthy and has no problem in meeting its short term obligations.
APP's Quick ratio of 2.41 is fine compared to the rest of the industry. APP outperforms 68.10% of its industry peers.

Evaluating Profitability: NASDAQ:APP

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:APP scores a 7 out of 10:

Looking at the Return On Assets, with a value of 21.13%, APP belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
With an excellent Return On Equity value of 122.59%, APP belongs to the best of the industry, outperforming 99.28% of the companies in the same industry.
APP's Return On Invested Capital of 26.01% is amongst the best of the industry. APP outperforms 96.77% of its industry peers.
The last Return On Invested Capital (26.01%) for APP is above the 3 year average (4.97%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 26.81%, APP belongs to the top of the industry, outperforming 92.47% of the companies in the same industry.
Looking at the Operating Margin, with a value of 35.78%, APP belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
APP has a Gross Margin of 73.89%. This is in the better half of the industry: APP outperforms 62.72% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.