APPLOVIN CORP-CLASS A (APP) Stock Fundamental Analysis
NASDAQ:APP - Nasdaq - US03831W1080 - Common Stock - Currency: USD
Overall APP gets a fundamental rating of 5 out of 10. We evaluated APP against 284 industry peers in the Software industry. APP is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. APP has a expensive valuation and it also scores bad on growth.
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 4 of the past 5 years.
1.2 Ratios
The Return On Assets of APP (21.13%) is better than 96.74% of its industry peers.
The Return On Equity of APP (122.59%) is better than 99.28% of its industry peers.
APP has a better Return On Invested Capital (26.01%) than 96.01% of its industry peers.
APP had an Average Return On Invested Capital over the past 3 years of 4.97%. This is significantly below the industry average of 11.91%.
The 3 year average ROIC (4.97%) for APP is below the current ROIC(26.01%), indicating increased profibility in the last year.
| Industry Rank | Sector 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%
1.3 Margins
APP has a Profit Margin of 26.81%. This is amongst the best in the industry. APP outperforms 92.03% of its industry peers.
Looking at the Operating Margin, with a value of 35.78%, APP belongs to the top of the industry, outperforming 96.74% 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 63.04% of its industry peers.
In the last couple of years the Gross Margin of APP has declined.
| Industry Rank | Sector 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%
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.
There is no outstanding debt for APP. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 22.08 indicates that APP is not in any danger for bankruptcy at the moment.
APP's Altman-Z score of 22.08 is amongst the best of the industry. APP outperforms 93.48% 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.
The Debt to FCF ratio of APP (2.01) is better than 64.86% of its industry peers.
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 86.23% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.7 | ||
| Debt/FCF | 2.01 | ||
| Altman-Z | 22.08 |
ROIC/WACC1.85
WACC14.05%
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.
APP's Current ratio of 2.41 is fine compared to the rest of the industry. APP outperforms 65.58% of its industry peers.
A Quick Ratio of 2.41 indicates that APP has no problem at all paying its short term obligations.
APP's Quick ratio of 2.41 is fine compared to the rest of the industry. APP outperforms 67.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.41 | ||
| Quick Ratio | 2.41 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 354.00% over the past year.
EPS 1Y (TTM)354%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%253.06%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%44.01%
3.2 Future
Based on estimates for the next years, APP will show a small growth in Earnings Per Share. The EPS will grow by 3.85% on average per year.
APP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.41% yearly.
EPS Next Y40.28%
EPS Next 2Y44.22%
EPS Next 3Y39.87%
EPS Next 5Y3.85%
Revenue Next Year25.6%
Revenue Next 2Y24.54%
Revenue Next 3Y22.02%
Revenue Next 5Y6.41%
3.3 Evolution
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 91.48, the valuation of APP can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as APP.
Compared to an average S&P500 Price/Earnings ratio of 29.63, APP is valued quite expensively.
APP is valuated quite expensively with a Price/Forward Earnings ratio of 65.21.
The rest of the industry has a similar Price/Forward Earnings ratio as APP.
The average S&P500 Price/Forward Earnings ratio is at 22.68. APP is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 91.48 | ||
| Fwd PE | 65.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, APP is valued a bit cheaper than 62.68% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of APP is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 79.72 | ||
| EV/EBITDA | 77.96 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates APP does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of APP may justify a higher PE ratio.
APP's earnings are expected to grow with 39.87% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.27
PEG (5Y)N/A
EPS Next 2Y44.22%
EPS Next 3Y39.87%
5. Dividend
5.1 Amount
APP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
415.31
-34.7 (-7.71%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners60.79%
Inst Owner Change7.93%
Ins Owners3.29%
Ins Owner Change-2.09%
Market Cap139.37B
Analysts80.67
Price Target495.37 (19.28%)
Short Float %5.82%
Short Ratio2.61
Dividend
| Industry Rank | Sector 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)12.41%
PT rev (3m)190.31%
EPS NQ rev (1m)-1.06%
EPS NQ rev (3m)11.86%
EPS NY rev (1m)0.57%
EPS NY rev (3m)10.5%
Revenue NQ rev (1m)0.87%
Revenue NQ rev (3m)3.15%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)1.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 91.48 | ||
| Fwd PE | 65.21 | ||
| P/S | 32.49 | ||
| P/FCF | 79.72 | ||
| P/OCF | 80.01 | ||
| P/B | 148.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 77.96 |
EPS(TTM)4.54
EY1.09%
EPS(NY)6.37
Fwd EY1.53%
FCF(TTM)5.21
FCFY1.25%
OCF(TTM)5.19
OCFY1.25%
SpS12.78
BVpS2.8
TBVpS-5.77
PEG (NY)2.27
PEG (5Y)N/A
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 22.08 |
F-Score8
WACC14.05%
ROIC/WACC1.85
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)354%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%253.06%
EPS Next Y40.28%
EPS Next 2Y44.22%
EPS Next 3Y39.87%
EPS Next 5Y3.85%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%44.01%
Revenue Next Year25.6%
Revenue Next 2Y24.54%
Revenue Next 3Y22.02%
Revenue Next 5Y6.41%
EBIT growth 1Y236.28%
EBIT growth 3Y215.2%
EBIT growth 5Y22.86%
EBIT Next Year339.11%
EBIT Next 3Y95.88%
EBIT Next 5Y66.45%
FCF growth 1Y433.36%
FCF growth 3Y68.83%
FCF growth 5Y50.35%
OCF growth 1Y420.64%
OCF growth 3Y68.24%
OCF growth 5Y50.17%