APPLOVIN CORP-CLASS A (APP) Stock Fundamental Analysis
NASDAQ:APP - Nasdaq - US03831W1080 - Common Stock - Currency: USD
Taking everything into account, APP scores 7 out of 10 in our fundamental rating. APP was compared to 282 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 not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings could make APP a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
APP had positive earnings in the past year.
APP had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: APP reported negative net income in multiple years.
In the past 5 years APP always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 33.63%, APP belongs to the best of the industry, outperforming 98.58% of the companies in the same industry.
Looking at the Return On Equity, with a value of 333.52%, APP belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Return On Invested Capital of APP (43.87%) is better than 98.94% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for APP is above the industry average of 12.28%.
The last Return On Invested Capital (43.87%) for APP is above the 3 year average (14.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 33.63% | ||
| ROE | 333.52% | ||
| ROIC | 43.87% |
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
Looking at the Profit Margin, with a value of 37.37%, APP belongs to the top of the industry, outperforming 97.52% of the companies in the same industry.
In the last couple of years the Profit Margin of APP has grown nicely.
The Operating Margin of APP (46.47%) is better than 99.29% of its industry peers.
In the last couple of years the Operating Margin of APP has grown nicely.
APP has a Gross Margin of 77.72%. This is in the better half of the industry: APP outperforms 74.82% of its industry peers.
APP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.47% | ||
| PM (TTM) | 37.37% | ||
| GM | 77.72% |
OM growth 3Y94.94%
OM growth 5Y15.26%
PM growth 3Y209.01%
PM growth 5Y34.23%
GM growth 3Y5.19%
GM growth 5Y-0.13%
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 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
APP has an Altman-Z score of 16.61. This indicates that APP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of APP (16.61) is better than 91.84% of its industry peers.
APP has a debt to FCF ratio of 1.46. This is a very positive value and a sign of high solvency as it would only need 1.46 years to pay back of all of its debts.
APP's Debt to FCF ratio of 1.46 is fine compared to the rest of the industry. APP outperforms 70.92% of its industry peers.
A Debt/Equity ratio of 6.10 is on the high side and indicates that APP has dependencies on debt financing.
APP has a Debt to Equity ratio of 6.10. This is amonst the worse of the industry: APP underperforms 84.04% 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 | 6.1 | ||
| Debt/FCF | 1.46 | ||
| Altman-Z | 16.61 |
ROIC/WACC4.07
WACC10.78%
2.3 Liquidity
APP has a Current Ratio of 1.68. This is a normal value and indicates that APP is financially healthy and should not expect problems in meeting its short term obligations.
APP's Current ratio of 1.68 is in line compared to the rest of the industry. APP outperforms 52.48% of its industry peers.
APP has a Quick Ratio of 1.68. This is a normal value and indicates that APP is financially healthy and should not expect problems in meeting its short term obligations.
APP has a Quick ratio (1.68) which is comparable to the rest of the industry.
APP does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.68 | ||
| Quick Ratio | 1.68 |
3. Growth
3.1 Past
APP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 262.50%, which is quite impressive.
The Earnings Per Share has been growing by 84.87% on average over the past years. This is a very strong growth
Looking at the last year, APP shows a very strong growth in Revenue. The Revenue has grown by 41.63%.
The Revenue has been growing by 36.49% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)262.5%
EPS 3Y269.34%
EPS 5Y84.87%
EPS Q2Q%231.34%
Revenue 1Y (TTM)41.63%
Revenue growth 3Y19.02%
Revenue growth 5Y36.49%
Sales Q2Q%40.25%
3.2 Future
APP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 31.97% yearly.
The Revenue is expected to grow by 24.93% on average over the next years. This is a very strong growth
EPS Next Y80.13%
EPS Next 2Y61.24%
EPS Next 3Y46.07%
EPS Next 5Y31.97%
Revenue Next Year22.37%
Revenue Next 2Y22.13%
Revenue Next 3Y22.91%
Revenue Next 5Y24.93%
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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 57.67, the valuation of APP can be described as expensive.
APP's Price/Earnings ratio is in line with the industry average.
APP is valuated expensively when we compare the Price/Earnings ratio to 27.51, which is the current average of the S&P500 Index.
APP is valuated quite expensively with a Price/Forward Earnings ratio of 29.76.
Based on the Price/Forward Earnings ratio, APP is valued a bit cheaper than 65.96% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.58. APP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.67 | ||
| Fwd PE | 29.76 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, APP is valued a bit cheaper than the industry average as 67.02% of the companies are valued more expensively.
APP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. APP is cheaper than 63.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.92 | ||
| EV/EBITDA | 44.11 |
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.
APP has an outstanding profitability rating, which may justify a higher PE ratio.
APP's earnings are expected to grow with 46.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.72
PEG (5Y)0.68
EPS Next 2Y61.24%
EPS Next 3Y46.07%
5. Dividend
5.1 Amount
APP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:APP (7/15/2025, 3:16:08 PM)
351.21
-4.69 (-1.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners72.87%
Inst Owner Change0.03%
Ins Owners4.87%
Ins Owner Change-0.5%
Market Cap118.85B
Analysts81.33
Price Target489.08 (39.26%)
Short Float %4.37%
Short Ratio1.68
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)44.78%
Min EPS beat(2)38.1%
Max EPS beat(2)51.45%
EPS beat(4)4
Avg EPS beat(4)35.11%
Min EPS beat(4)16.95%
Max EPS beat(4)51.45%
EPS beat(8)8
Avg EPS beat(8)51.1%
EPS beat(12)8
Avg EPS beat(12)-30.98%
EPS beat(16)8
Avg EPS beat(16)-70.07%
Revenue beat(2)2
Avg Revenue beat(2)6.86%
Min Revenue beat(2)6.23%
Max Revenue beat(2)7.5%
Revenue beat(4)3
Avg Revenue beat(4)4.37%
Min Revenue beat(4)-1.18%
Max Revenue beat(4)7.5%
Revenue beat(8)7
Avg Revenue beat(8)4.56%
Revenue beat(12)9
Avg Revenue beat(12)2.5%
Revenue beat(16)12
Avg Revenue beat(16)1.21%
PT rev (1m)1.54%
PT rev (3m)-8.02%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)40.13%
EPS NY rev (1m)16.9%
EPS NY rev (3m)23.76%
Revenue NQ rev (1m)-4.56%
Revenue NQ rev (3m)-6.79%
Revenue NY rev (1m)-1.88%
Revenue NY rev (3m)-1.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.67 | ||
| Fwd PE | 29.76 | ||
| P/S | 23.14 | ||
| P/FCF | 46.92 | ||
| P/OCF | 46.83 | ||
| P/B | 206.54 | ||
| P/tB | N/A | ||
| EV/EBITDA | 44.11 |
EPS(TTM)6.09
EY1.73%
EPS(NY)11.8
Fwd EY3.36%
FCF(TTM)7.49
FCFY2.13%
OCF(TTM)7.5
OCFY2.14%
SpS15.18
BVpS1.7
TBVpS-5.67
PEG (NY)0.72
PEG (5Y)0.68
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 33.63% | ||
| ROE | 333.52% | ||
| ROCE | 55.53% | ||
| ROIC | 43.87% | ||
| ROICexc | 50.32% | ||
| ROICexgc | 150.62% | ||
| OM | 46.47% | ||
| PM (TTM) | 37.37% | ||
| GM | 77.72% | ||
| FCFM | 49.33% |
ROA(3y)10.07%
ROA(5y)4.98%
ROE(3y)54.28%
ROE(5y)N/A
ROIC(3y)14.51%
ROIC(5y)9.34%
ROICexc(3y)16.97%
ROICexc(5y)11.03%
ROICexgc(3y)60.6%
ROICexgc(5y)N/A
ROCE(3y)18.38%
ROCE(5y)11.84%
ROICexcg growth 3Y130.56%
ROICexcg growth 5YN/A
ROICexc growth 3Y131.06%
ROICexc growth 5Y6.08%
OM growth 3Y94.94%
OM growth 5Y15.26%
PM growth 3Y209.01%
PM growth 5Y34.23%
GM growth 3Y5.19%
GM growth 5Y-0.13%
F-Score8
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.1 | ||
| Debt/FCF | 1.46 | ||
| Debt/EBITDA | 1.25 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 11.82 | ||
| Cash Conversion | 90.57% | ||
| Profit Quality | 132% | ||
| Current Ratio | 1.68 | ||
| Quick Ratio | 1.68 | ||
| Altman-Z | 16.61 |
F-Score8
WACC10.78%
ROIC/WACC4.07
Cap/Depr(3y)1.05%
Cap/Depr(5y)1.13%
Cap/Sales(3y)0.16%
Cap/Sales(5y)0.18%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)262.5%
EPS 3Y269.34%
EPS 5Y84.87%
EPS Q2Q%231.34%
EPS Next Y80.13%
EPS Next 2Y61.24%
EPS Next 3Y46.07%
EPS Next 5Y31.97%
Revenue 1Y (TTM)41.63%
Revenue growth 3Y19.02%
Revenue growth 5Y36.49%
Sales Q2Q%40.25%
Revenue Next Year22.37%
Revenue Next 2Y22.13%
Revenue Next 3Y22.91%
Revenue Next 5Y24.93%
EBIT growth 1Y157.5%
EBIT growth 3Y132.02%
EBIT growth 5Y57.32%
EBIT Next Year123.13%
EBIT Next 3Y53.38%
EBIT Next 5Y39.49%
FCF growth 1Y248.78%
FCF growth 3Y80.45%
FCF growth 5Y60.75%
OCF growth 1Y246.17%
OCF growth 3Y79.67%
OCF growth 5Y60.27%