AppLovin (APP) AI Stock Analysis

• Market Cap: $84.97B
• Dividend Yield: N/A
• Average Volume (3M): 11.01M
• Price to Earnings (P/E): 55.0
• Beta (1Y): 3.26
• Revenue Growth: 43.44%
• EPS Growth: 351.19%
• Country: US
• Employees: 1,533
• Sector: Technology
• Sector Strength: 51
• Industry: Software - Application
• EPS (TTM): 4.54
• Shares Outstanding: 309,269,680
• 10 Day Avg. Volume: 10,846,476
• 30 Day Avg. Volume: 11,009,026
• PEG Ratio: 0.16
• Price to Book (P/B): N/A
• Price to Sales (P/S): 24.89
• Price to Cash Flow (P/CF): 48.50
• P/FCF Ratio: 48.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $479.07
• Price Target Upside: 102.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

AppLovin's stock is rated moderately high, supported by robust financial performance, significant revenue and profit growth, and a positive outlook from the earnings call. However, high valuation metrics and mixed technical signals temper the score. The company's focus on strategic realignment by selling its Apps business and emphasizing its advertising platform is a potential growth catalyst. Investors should be cautious of the high leverage and ensure ongoing operational efficiency.

Positive Factors

Competitive Position

AppLovin’s advertising stack is not easily replicable, underscoring its competitive position.

E-commerce Growth

The rapid scale of AppLovin’s e-commerce business has reached a billion-dollar run rate within months.

Financial Performance

APP's execution, fundamentals, and strong level of valuation support on GAAP PE give confidence the stock will outperform moving forward.

Market Share and Innovation

APP has consistently gained share in gaming ads and has built scale in non-gaming advertising far faster than previously expected.

Negative Factors

Macro Environment Risks

There is acknowledgment of risks in the current macro environment and potential for tactical downside.

Platform Risk

The short seller report claims that AppLovin is at high risk of being de-platformed off iOS, Android, or Meta.

AppLovin Business Overview & Revenue Model

Company Description

AppLovin Corporation engages in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; Adjust, an analytics platform that helps marketers grow their mobile apps with solutions for measuring, optimizing campaigns, and protecting user data; and MAX, an in-app bidding software that optimizes the value of an app's advertising inventory by running a real-time competitive auction. Its business clients include various advertisers, publishers, internet platforms, and others. The company was incorporated in 2011 and is headquartered in Palo Alto, California.

How the Company Makes Money

AppLovin makes money primarily through its two main business segments: Software Platform and Apps. The Software Platform segment generates revenue by providing app developers with tools for user acquisition, monetization, and analytics, primarily through its proprietary software solutions that facilitate data-driven marketing and ad placement. The Apps segment derives revenue from mobile gaming, earning money through in-app purchases and advertising within its own games or those developed by partner studios. Key revenue streams include fees from developers using its platform and advertising revenue generated from its gaming portfolio. Partnerships with app developers and advertisers play a significant role in driving earnings by expanding the reach and effectiveness of its platform and games.

AppLovin Financial Statement Overview

Summary

AppLovin demonstrates solid financial performance characterized by strong revenue and profit growth, improving profitability margins, and robust cash flows. While leverage remains high, posing a risk, the significant improvement in equity and cash flow metrics is promising. The company is well-positioned in the software industry with a trajectory of growth and efficiency, though careful management of debt levels will be crucial.

Income Statement

AppLovin has shown strong growth with a consistent increase in total revenue over the years, reaching $4.71 billion in 2024 from $0.99 billion in 2019. The gross profit margin has remained robust, reflecting efficient cost management. Net profit margins improved significantly from losses in earlier years to a positive 33.55% in 2024, indicating enhanced profitability. EBIT and EBITDA margins are also solid, with EBIT margin at 39.78% and EBITDA margin at 39.78% for 2024, showcasing operational efficiency. The revenue growth rate from 2023 to 2024 was impressive at 43.43%.

Balance Sheet

The balance sheet shows moderate improvement, with stockholders' equity rebounding to $1.09 billion in 2024 from negative values pre-2021. The debt-to-equity ratio remains high at 3.26, indicating significant leverage, but the equity ratio improved to 18.57%, reflecting a better balance between equity and assets. Return on equity (ROE) surged to 144.99% in 2024, driven by high net income, but high leverage poses a risk.

Cash Flow

AppLovin's cash flow performance is strong, with a substantial increase in operating cash flow and free cash flow over the years. The free cash flow growth rate from 2023 to 2024 was an impressive 98.09%. The operating cash flow to net income ratio is favorable at 1.33, indicating efficient cash generation relative to earnings. Free cash flow to net income ratio is robust at 1.33, highlighting strong cash flow support for earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.71B	3.28B	2.82B	2.79B	1.45B
	Gross Profit
3.54B	2.22B	1.56B	1.81B	895.51M
	EBIT
1.87B	648.21M	-8.65M	150.02M	24.84M
	EBITDA
2.34B	1.15B	513.77M	597.74M	186.79M
	Net Income Common Stockholders
1.58B	356.71M	-217.41M	35.45M	-125.93M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
741.41M	502.15M	1.08B	1.52B	317.24M
	Total Assets
5.87B	5.36B	5.85B	6.16B	2.15B
	Total Debt
3.56B	3.18B	3.30B	3.31B	1.69B
	Net Debt
2.81B	2.68B	2.22B	1.79B	1.38B
	Total Liabilities
4.78B	4.10B	3.95B	4.03B	2.31B
	Stockholders Equity
1.09B	1.26B	1.90B	2.14B	-158.54M
Cash Flow		Free Cash Flow
2.09B	1.06B	406.16M	356.39M	219.64M
	Operating Cash Flow
2.10B	1.06B	412.77M	361.85M	222.88M
	Investing Cash Flow
-106.75M	-77.83M	-1.37B	-1.21B	-679.89M
	Financing Cash Flow
-1.75B	-1.56B	-526.85M	3.11B	377.86M

AppLovin Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 236.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APP, the sentiment is Negative. The current price of 236.07 is below the 20-day moving average (MA) of 277.80, below the 50-day MA of 326.42, and above the 200-day MA of 227.09, indicating a neutral trend. The MACD of -20.61 indicates Positive momentum. The RSI at 40.79 is Neutral, neither overbought nor oversold. The STOCH value of 49.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for APP.

AppLovin Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOW	72 Outperform	$165.72B	116.93	16.53%	―	22.44%	-18.31%
APP	69 Neutral	$84.97B	55.05	134.52%	―	43.44%	351.19%
TTD	66 Neutral	$24.13B	62.32	15.37%	―	25.63%	118.49%
DDOG	66 Neutral	$31.72B	179.20	7.75%	―	26.12%	274.50%
GWRE	63 Neutral	$16.12B	528.94	-1.34%	―	17.16%	67.81%
SNOW	63 Neutral	$48.43B	―	-31.43%	―	29.21%	-51.47%
Sector *	57 Neutral	$20.06B	9.61	-11.19%	2.76%	5.41%	-24.85%

AppLovin Corporate Events

AppLovin Appoints Maynard Webb to Board of Directors

On April 9, 2025, AppLovin Corporation announced the appointment of Maynard Webb to its Board of Directors, where he will also serve on the Audit Committee and Nominating and Corporate Governance Committee. Webb, a seasoned executive with extensive experience in technology and venture capital, is expected to bring valuable insights to AppLovin’s strategic direction. Additionally, Edward Oberwager, a current board member, notified the company on April 8, 2025, that he will not stand for re-election at the upcoming 2025 Annual Meeting of Stockholders, although his decision was not due to any disagreements with the company.

Spark’s Take on APP Stock

According to Spark, TipRanks’ AI Analyst, APP is a Neutral.

AppLovin’s stock is rated moderately high, supported by robust financial performance, significant revenue and profit growth, and a positive outlook from the earnings call. However, high valuation metrics and mixed technical signals temper the score. The company’s focus on strategic realignment by selling its Apps business and emphasizing its advertising platform is a potential growth catalyst. Investors should be cautious of the high leverage and ensure ongoing operational efficiency.

To see Spark’s full report on APP stock, click here.

AppLovin Plans to Sell Mobile Gaming Business

On February 10, 2025, Katie Jansen, AppLovin’s Chief Marketing Officer, announced her resignation effective March 14, without any disagreements related to company affairs. On February 12, 2025, the company revealed plans to sell its mobile gaming business for $900 million through a term sheet agreement, involving both equity and cash, with a provision for financing by AppLovin in case the acquirer cannot secure necessary funds.