APPLOVIN CORP-CLASS A (NASDAQ:APP) was identified as an affordable growth stock by our screening process. The company combines strong growth metrics with solid profitability and financial health while maintaining a reasonable valuation. Below, we break down why APP stands out in these areas.
Growth Prospects
APP has demonstrated exceptional growth, earning a 9/10 in the Growth category. Key highlights include:
- Earnings Per Share (EPS) growth of 262.50% over the past year.
- Revenue growth of 41.63% in the last 12 months.
- Expected future EPS growth of 27.00% annually, with revenue projected to increase by 18.31% per year.
These figures suggest the company is expanding rapidly, outpacing many peers in the software industry.
Valuation Considerations
With a 5/10 Valuation rating, APP is not excessively priced relative to its growth potential:
- The PEG ratio (Price/Earnings to Growth) indicates a fair valuation when accounting for future earnings expansion.
- While the P/E ratio of 58.18 appears high, it is justified by APP’s strong profitability and expected earnings growth.
- The Enterprise Value to EBITDA ratio suggests APP is cheaper than 68.20% of its industry peers.
Profitability and Financial Health
APP scores 8/10 in both Profitability and Financial Health, reinforcing its stability:
- Return on Assets (33.63%) and Return on Equity (333.52%) are among the best in the industry.
- Operating margins of 46.47% reflect efficient cost management.
- A solid Altman-Z score of 16.43 indicates low bankruptcy risk.
While the company carries a higher debt-to-equity ratio, its strong free cash flow coverage mitigates concerns.
For a deeper analysis, review the full fundamental report for APP.
Our Affordable Growth screener lists more stocks with similar characteristics and is updated daily.
Disclaimer
This is not investing advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.
