Overall APP gets a fundamental rating of 7 out of 10. We evaluated APP against 278 industry peers in the Software industry. Both the health and profitability get an excellent rating, making APP a very profitable company, without any liquidiy or solvency issues. APP is growing strongly while it is still valued neutral. This is a good combination! This makes APP very considerable for growth and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year APP was profitable.
In the past year APP had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: APP reported negative net income in multiple years.
APP had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

APP has a better Return On Assets (44.61%) than 99.28% of its industry peers.
With an excellent Return On Equity value of 191.99%, APP belongs to the best of the industry, outperforming 99.64% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 52.42%, APP belongs to the top of the industry, outperforming 98.92% of the companies in the same industry.
APP had an Average Return On Invested Capital over the past 3 years of 14.51%. This is above the industry average of 10.74%.
The 3 year average ROIC (14.51%) for APP is below the current ROIC(52.42%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	44.61%
ROE	191.99%
ROIC	52.42%

ROA(3y)10.07%

ROA(5y)4.98%

ROE(3y)54.28%

ROE(5y)N/A

ROIC(3y)14.51%

ROIC(5y)9.34%

1.3 Margins

With an excellent Profit Margin value of 51.26%, APP belongs to the best of the industry, outperforming 93.53% of the companies in the same industry.
APP's Profit Margin has improved in the last couple of years.
APP has a Operating Margin of 63.35%. This is amongst the best in the industry. APP outperforms 97.84% of its industry peers.
In the last couple of years the Operating Margin of APP has grown nicely.
APP has a better Gross Margin (83.31%) than 88.85% of its industry peers.
In the last couple of years the Gross Margin of APP has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	63.35%
PM (TTM)	51.26%
GM	83.31%

OM growth 3Y94.93%

OM growth 5Y15.27%

PM growth 3Y209%

PM growth 5Y34.24%

GM growth 3Y5.19%

GM growth 5Y-0.13%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so APP is creating value.
Compared to 1 year ago, APP has about the same amount of shares outstanding.
APP has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, APP has an improved debt to assets ratio.

2.2 Solvency

An Altman-Z score of 25.22 indicates that APP is not in any danger for bankruptcy at the moment.
APP's Altman-Z score of 25.22 is amongst the best of the industry. APP outperforms 96.40% of its industry peers.
The Debt to FCF ratio of APP is 1.03, which is an excellent value as it means it would take APP, only 1.03 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.03, APP is in the better half of the industry, outperforming 74.82% of the companies in the same industry.
A Debt/Equity ratio of 2.38 is on the high side and indicates that APP has dependencies on debt financing.
With a Debt to Equity ratio value of 2.38, APP is not doing good in the industry: 83.45% of the companies in the same industry are doing better.
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.

		Industry Rank	Sector Rank
Debt/Equity	2.38
Debt/FCF	1.03
Altman-Z	25.22

ROIC/WACC4.72

WACC11.11%

2.3 Liquidity

A Current Ratio of 3.25 indicates that APP has no problem at all paying its short term obligations.
With a decent Current ratio value of 3.25, APP is doing good in the industry, outperforming 76.98% of the companies in the same industry.
APP has a Quick Ratio of 3.25. This indicates that APP is financially healthy and has no problem in meeting its short term obligations.
APP's Quick ratio of 3.25 is fine compared to the rest of the industry. APP outperforms 76.98% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.25
Quick Ratio	3.25

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

APP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 166.36%, which is quite impressive.
The Earnings Per Share has been growing by 84.83% on average over the past years. This is a very strong growth
The Revenue has grown by 40.81% in the past year. This is a very strong growth!
APP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 36.49% yearly.

EPS 1Y (TTM)166.36%

EPS 3Y269.22%

EPS 5Y84.83%

EPS Q2Q%96%

Revenue 1Y (TTM)40.81%

Revenue growth 3Y19.02%

Revenue growth 5Y36.49%

Sales Q2Q%17.26%

3.2 Future

APP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 44.45% yearly.
The Revenue is expected to grow by 27.22% on average over the next years. This is a very strong growth

EPS Next Y107.83%

EPS Next 2Y80.05%

EPS Next 3Y62.52%

EPS Next 5Y44.45%

Revenue Next Year24.01%

Revenue Next 2Y30.35%

Revenue Next 3Y29.22%

Revenue Next 5Y27.22%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

APP is valuated quite expensively with a Price/Earnings ratio of 59.66.
APP's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.21. APP is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 35.63, APP can be considered very expensive at the moment.
APP's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 25.98. APP is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	59.66
Fwd PE	35.63

4.2 Price Multiples

61.15% of the companies in the same industry are more expensive than APP, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as APP.

		Industry Rank	Sector Rank
P/FCF	52.16
EV/EBITDA	47.29

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
APP has an outstanding profitability rating, which may justify a higher PE ratio.
APP's earnings are expected to grow with 62.52% in the coming years. This may justify a more expensive valuation.