APPLOVIN CORP-CLASS A (NASDAQ:APP) is showing good growth, while it is not too expensive.

Our stock screener has spotted APPLOVIN CORP-CLASS A (NASDAQ:APP) as a growth stock which is not overvalued. APP is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Understanding APP's Growth Score

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. APP scores a 9 out of 10:

• The Earnings Per Share has grown by an impressive 354.00% over the past year.
• 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 43.44%.
• APP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 36.49% yearly.
• The Earnings Per Share is expected to grow by 27.00% on average over the next years. This is a very strong growth
• The Revenue is expected to grow by 18.31% on average over the next years. This is quite good.

ChartMill's Evaluation of Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. APP scores a 5 out of 10:

• 62.32% of the companies in the same industry are more expensive than APP, based on the Price/Forward Earnings ratio.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of APP indicates a somewhat cheap valuation: APP is cheaper than 71.13% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, APP is valued a bit cheaper than the industry average as 63.03% of the companies are valued more expensively.
• APP has an outstanding profitability rating, which may justify a higher PE ratio.
• A more expensive valuation may be justified as APP's earnings are expected to grow with 38.53% in the coming years.

Analyzing Health Metrics

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. APP has earned a 8 out of 10:

• An Altman-Z score of 11.62 indicates that APP is not in any danger for bankruptcy at the moment.
• With an excellent Altman-Z score value of 11.62, APP belongs to the best of the industry, outperforming 90.85% of the companies in the same industry.
• APP has a debt to FCF ratio of 1.68. This is a very positive value and a sign of high solvency as it would only need 1.68 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 1.68, APP is in the better half of the industry, outperforming 68.31% of the companies in the same industry.
• 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.
• A Current Ratio of 2.19 indicates that APP has no problem at all paying its short term obligations.
• APP's Current ratio of 2.19 is fine compared to the rest of the industry. APP outperforms 63.03% of its industry peers.
• APP has a Quick Ratio of 2.19. This indicates that APP is financially healthy and has no problem in meeting its short term obligations.
• With a decent Quick ratio value of 2.19, APP is doing good in the industry, outperforming 63.73% of the companies in the same industry.

Profitability Examination for APP

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. APP has earned a 8 out of 10:

• With an excellent Return On Assets value of 26.88%, APP belongs to the best of the industry, outperforming 97.18% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 144.74%, APP belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
• APP has a better Return On Invested Capital (30.76%) than 97.89% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for APP is above the industry average of 10.61%.
• The last Return On Invested Capital (30.76%) for APP is above the 3 year average (14.51%), which is a sign of increasing profitability.
• APP has a better Profit Margin (33.50%) than 94.01% of its industry peers.
• In the last couple of years the Profit Margin of APP has grown nicely.
• APP's Operating Margin of 39.78% is amongst the best of the industry. APP outperforms 97.18% of its industry peers.
• In the last couple of years the Operating Margin of APP has grown nicely.
• APP has a Gross Margin of 75.22%. This is in the better half of the industry: APP outperforms 69.37% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of APP

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.