APPLOVIN CORP-CLASS A (APP)

US03831W1080 - Common Stock

325.22  +4.03 (+1.25%)

Premarket: 337.98 +12.76 (+3.92%)

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to APP. APP was compared to 279 industry peers in the Software industry. APP scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 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.



7

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.
Each year in the past 5 years APP had a positive operating cash flow.

1.2 Ratios

With an excellent Return On Assets value of 21.13%, APP belongs to the best of the industry, outperforming 96.77% of the companies in the same industry.
APP has a better Return On Equity (122.59%) than 99.28% of its industry peers.
The Return On Invested Capital of APP (26.01%) is better than 97.49% of its industry peers.
The Average Return On Invested Capital over the past 3 years for APP is significantly below the industry average of 11.54%.
The 3 year average ROIC (4.97%) for APP is below the current ROIC(26.01%), indicating increased profibility in the last year.
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%

1.3 Margins

Looking at the Profit Margin, with a value of 26.81%, APP belongs to the top of the industry, outperforming 93.19% of the companies in the same industry.
APP's Operating Margin of 35.78% is amongst the best of the industry. APP outperforms 97.49% of its industry peers.
In the last couple of years the Operating Margin of APP has declined.
With a decent Gross Margin value of 73.89%, APP is doing good in the industry, outperforming 62.01% of the companies in the same industry.
In the last couple of years the Gross Margin of APP has declined.
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%

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
APP has less shares outstanding than it did 5 years ago.
The debt/assets ratio for APP is higher compared to a year ago.

2.2 Solvency

APP has an Altman-Z score of 16.50. 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 16.50, APP belongs to the top of the industry, outperforming 90.68% 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 67.03% of the companies in the same industry.
APP has a Debt/Equity ratio of 3.70. This is a high value indicating a heavy dependency on external financing.
APP's Debt to Equity ratio of 3.70 is on the low side compared to the rest of the industry. APP is outperformed by 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 16.5
ROIC/WACC2.19
WACC11.86%

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.
With a decent Current ratio value of 2.41, APP is doing good in the industry, outperforming 67.03% of the companies in the same industry.
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.
Industry RankSector Rank
Current Ratio 2.41
Quick Ratio 2.41

7

3. Growth

3.1 Past

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!
APP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 46.69% yearly.
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

Based on estimates for the next years, APP will show a very strong growth in Earnings Per Share. The EPS will grow by 32.41% on average per year.
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.
EPS Next Y269.41%
EPS Next 2Y126.81%
EPS Next 3Y92%
EPS Next 5Y32.41%
Revenue Next Year39.15%
Revenue Next 2Y28.52%
Revenue Next 3Y24.66%
Revenue Next 5Y14.27%

3.3 Evolution

The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

4

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 98.55, which means the current valuation is very expensive for APP.
The rest of the industry has a similar Price/Earnings ratio as APP.
Compared to an average S&P500 Price/Earnings ratio of 28.65, APP is valued quite expensively.
APP is valuated quite expensively with a Price/Forward Earnings ratio of 63.22.
APP's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.56, APP is valued quite expensively.
Industry RankSector Rank
PE 98.55
Fwd PE 63.22

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, APP is valued a bit cheaper than 65.95% of the companies in the same industry.
APP's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 62.43
EV/EBITDA 56.75

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 a very decent profitability rating, which may justify a higher PE ratio.
APP's earnings are expected to grow with 92.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.37
PEG (5Y)N/A
EPS Next 2Y126.81%
EPS Next 3Y92%

0

5. Dividend

5.1 Amount

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

APPLOVIN CORP-CLASS A

NASDAQ:APP (11/20/2024, 8:07:02 PM)

Premarket: 337.98 +12.76 (+3.92%)

325.22

+4.03 (+1.25%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap109.14B
Analysts
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Dividend
Industry RankSector Rank
Dividend Yield N/A
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 98.55
Fwd PE 63.22
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.37
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 21.13%
ROE 122.59%
ROCE
ROIC
ROICexc
ROICexgc
OM 35.78%
PM (TTM) 26.81%
GM 73.89%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.79
Health
Industry RankSector Rank
Debt/Equity 3.7
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 2.41
Quick Ratio 2.41
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)1000%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y269.41%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)41.48%
Revenue growth 3Y31.28%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y