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APPLOVIN CORP-CLASS A (APP) Stock Fundamental Analysis

NASDAQ:APP - Nasdaq - US03831W1080 - Common Stock

363.75  +25.36 (+7.49%)

Fundamental Rating

6

Taking everything into account, APP scores 6 out of 10 in our fundamental rating. APP was compared to 285 industry peers in the Software industry. APP gets an excellent profitability rating and is at the same time showing great financial health properties. APP is growing strongly while it is still valued neutral. This is a good combination! With these ratings, APP could be worth investigating further for growth and quality investing!.


Dividend Valuation Growth Profitability Health

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7

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.
In multiple years APP reported negative net income over the last 5 years.
In the past 5 years APP always reported a positive cash flow from operatings.
APP Yearly Net Income VS EBIT VS OCF VS FCFAPP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2018 2019 2020 2021 2022 2023 0 200M -200M 400M 600M 800M 1B

1.2 Ratios

Looking at the Return On Assets, with a value of 21.13%, APP belongs to the top of the industry, outperforming 96.42% 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.
With an excellent Return On Invested Capital value of 26.01%, APP belongs to the best of the industry, outperforming 96.77% of the companies in the same industry.
APP had an Average Return On Invested Capital over the past 3 years of 4.97%. This is significantly below the industry average of 12.12%.
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.
Industry RankSector Rank
ROA 21.13%
ROE 122.59%
ROIC 26.01%
ROA(3y)1.28%
ROA(5y)0.88%
ROE(3y)6.54%
ROE(5y)N/A
ROIC(3y)4.97%
ROIC(5y)6.38%
APP Yearly ROA, ROE, ROICAPP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2018 2019 2020 2021 2022 2023 0 20 -20 40 -40 60

1.3 Margins

APP's Profit Margin of 26.81% is amongst the best of the industry. APP outperforms 92.11% of its industry peers.
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's Operating Margin has declined in the last couple of years.
APP's Gross Margin of 73.89% is fine compared to the rest of the industry. APP outperforms 62.72% of its industry peers.
APP's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 35.78%
PM (TTM) 26.81%
GM 73.89%
OM growth 3Y140.1%
OM growth 5Y-16.25%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.15%
GM growth 5Y-5.29%
APP Yearly Profit, Operating, Gross MarginsAPP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2018 2019 2020 2021 2022 2023 0 50 -50

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7

2. Health

2.1 Basic Checks

APP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, APP has less shares outstanding
Compared to 5 years ago, APP has less shares outstanding
Compared to 1 year ago, APP has a worse debt to assets ratio.
APP Yearly Shares OutstandingAPP Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 2023 100M 200M 300M
APP Yearly Total Debt VS Total AssetsAPP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2023 2B 4B 6B

2.2 Solvency

APP has an Altman-Z score of 17.09. This indicates that APP is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 17.09, APP belongs to the top of the industry, outperforming 91.76% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 2.01, APP is in the better half of the industry, outperforming 65.59% of the companies in the same industry.
A Debt/Equity ratio of 3.70 is on the high side and indicates that APP has dependencies on debt financing.
APP has a worse Debt to Equity ratio (3.70) than 86.02% of its industry peers.
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 RankSector Rank
Debt/Equity 3.7
Debt/FCF 2.01
Altman-Z 17.09
ROIC/WACC2.32
WACC11.19%
APP Yearly LT Debt VS Equity VS FCFAPP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2018 2019 2020 2021 2022 2023 0 1B 2B 3B

2.3 Liquidity

APP has a Current Ratio of 2.41. This indicates that APP is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of APP (2.41) is better than 65.95% of its industry peers.
A Quick Ratio of 2.41 indicates that APP has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.41, APP is doing good in the industry, outperforming 68.10% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.41
Quick Ratio 2.41
APP Yearly Current Assets VS Current LiabilitesAPP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2023 1B 2B 3B

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7

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 1000.00% over the past year.
APP shows a strong growth in Revenue. In the last year, the Revenue has grown by 41.48%.
Measured over the past years, APP shows a very strong growth in Revenue. The Revenue has been growing by 46.69% on average per year.
EPS 1Y (TTM)1000%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%316.67%
Revenue 1Y (TTM)41.48%
Revenue growth 3Y31.28%
Revenue growth 5Y46.69%
Sales Q2Q%38.64%

3.2 Future

APP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 32.41% yearly.
The Revenue is expected to grow by 14.27% on average over the next years. This is quite good.
EPS Next Y305.87%
EPS Next 2Y142.78%
EPS Next 3Y98.95%
EPS Next 5Y32.41%
Revenue Next Year41.03%
Revenue Next 2Y31.43%
Revenue Next 3Y27.64%
Revenue Next 5Y14.27%

3.3 Evolution

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.
APP Yearly Revenue VS EstimatesAPP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2B 4B 6B 8B
APP Yearly EPS VS EstimatesAPP Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 2 4 6

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4

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 110.23, APP can be considered very expensive at the moment.
APP's Price/Earnings is on the same level as the industry average.
APP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.29.
Based on the Price/Forward Earnings ratio of 61.71, the valuation of APP can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as APP.
The average S&P500 Price/Forward Earnings ratio is at 24.44. APP is valued rather expensively when compared to this.
Industry RankSector Rank
PE 110.23
Fwd PE 61.71
APP Price Earnings VS Forward Price EarningsAPP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80 100

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, APP is valued a bit cheaper than 66.31% of the companies in the same industry.
APP's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 69.82
EV/EBITDA 58.99
APP Per share dataAPP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5 10

4.3 Compensation for Growth

APP's 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.
APP's earnings are expected to grow with 98.95% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.36
PEG (5Y)N/A
EPS Next 2Y142.78%
EPS Next 3Y98.95%

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0

5. Dividend

5.1 Amount

APP does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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APPLOVIN CORP-CLASS A

NASDAQ:APP (1/22/2025, 10:19:09 AM)

363.75

+25.36 (+7.49%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-06 2024-11-06/amc
Earnings (Next)02-12 2025-02-12/amc
Inst Owners60.79%
Inst Owner Change-0.44%
Ins Owners3.29%
Ins Owner Change-2.35%
Market Cap122.07B
Analysts81.33
Price Target331.32 (-8.92%)
Short Float %8.15%
Short Ratio2.82
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)25.44%
Min EPS beat(2)16.95%
Max EPS beat(2)33.93%
EPS beat(4)4
Avg EPS beat(4)26.04%
Min EPS beat(4)16.07%
Max EPS beat(4)37.19%
EPS beat(8)6
Avg EPS beat(8)-38.87%
EPS beat(12)6
Avg EPS beat(12)-90.71%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)1.87%
Min Revenue beat(2)-1.18%
Max Revenue beat(2)4.92%
Revenue beat(4)3
Avg Revenue beat(4)3.24%
Min Revenue beat(4)-1.18%
Max Revenue beat(4)7.52%
Revenue beat(8)7
Avg Revenue beat(8)3.21%
Revenue beat(12)8
Avg Revenue beat(12)-0.07%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)10.07%
PT rev (3m)204%
EPS NQ rev (1m)0%
EPS NQ rev (3m)46.79%
EPS NY rev (1m)0%
EPS NY rev (3m)18.3%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)10.66%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.64%
Valuation
Industry RankSector Rank
PE 110.23
Fwd PE 61.71
P/S 28.46
P/FCF 69.82
P/OCF 70.08
P/B 130.11
P/tB N/A
EV/EBITDA 58.99
EPS(TTM)3.3
EY0.91%
EPS(NY)5.89
Fwd EY1.62%
FCF(TTM)5.21
FCFY1.43%
OCF(TTM)5.19
OCFY1.43%
SpS12.78
BVpS2.8
TBVpS-5.77
PEG (NY)0.36
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 21.13%
ROE 122.59%
ROCE 32.92%
ROIC 26.01%
ROICexc 29.61%
ROICexgc 99.45%
OM 35.78%
PM (TTM) 26.81%
GM 73.89%
FCFM 40.75%
ROA(3y)1.28%
ROA(5y)0.88%
ROE(3y)6.54%
ROE(5y)N/A
ROIC(3y)4.97%
ROIC(5y)6.38%
ROICexc(3y)5.83%
ROICexc(5y)9.17%
ROICexgc(3y)27.54%
ROICexgc(5y)N/A
ROCE(3y)6.31%
ROCE(5y)8.08%
ROICexcg growth 3YN/A
ROICexcg growth 5Y-34.1%
ROICexc growth 3Y115.69%
ROICexc growth 5Y-36.32%
OM growth 3Y140.1%
OM growth 5Y-16.25%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.15%
GM growth 5Y-5.29%
F-Score8
Asset Turnover0.79
Health
Industry RankSector Rank
Debt/Equity 3.7
Debt/FCF 2.01
Debt/EBITDA 1.76
Cap/Depr N/A
Cap/Sales N/A
Interest Coverage 3.36
Cash Conversion 88.2%
Profit Quality 152.01%
Current Ratio 2.41
Quick Ratio 2.41
Altman-Z 17.09
F-Score8
WACC11.19%
ROIC/WACC2.32
Cap/Depr(3y)1.12%
Cap/Depr(5y)1.65%
Cap/Sales(3y)0.19%
Cap/Sales(5y)0.22%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1000%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%316.67%
EPS Next Y305.87%
EPS Next 2Y142.78%
EPS Next 3Y98.95%
EPS Next 5Y32.41%
Revenue 1Y (TTM)41.48%
Revenue growth 3Y31.28%
Revenue growth 5Y46.69%
Sales Q2Q%38.64%
Revenue Next Year41.03%
Revenue Next 2Y31.43%
Revenue Next 3Y27.64%
Revenue Next 5Y14.27%
EBIT growth 1Y236.28%
EBIT growth 3Y215.2%
EBIT growth 5Y22.86%
EBIT Next Year338.78%
EBIT Next 3Y94.56%
EBIT Next 5Y43.94%
FCF growth 1Y433.36%
FCF growth 3Y68.83%
FCF growth 5Y50.35%
OCF growth 1Y420.64%
OCF growth 3Y68.24%
OCF growth 5Y50.17%