APPLOVIN CORP-CLASS A (APP) Stock Fundamental Analysis
NASDAQ:APP - Nasdaq - US03831W1080 - Common Stock - Currency: USD
Overall APP gets a fundamental rating of 7 out of 10. We evaluated APP against 282 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 overvalued while it is showing excellent growth. This is an interesting combination. This makes APP very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year APP was profitable.
In the past year APP had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: APP reported negative net income in multiple years.
APP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
APP has a Return On Assets of 33.63%. This is amongst the best in the industry. APP outperforms 98.58% of its industry peers.
APP's Return On Equity of 333.52% is amongst the best of the industry. APP outperforms 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 43.87%, APP belongs to the top of the industry, outperforming 98.94% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for APP is above the industry average of 12.26%.
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
APP has a better Profit Margin (37.37%) than 97.52% of its industry peers.
APP's Profit Margin has improved in the last couple of years.
APP has a Operating Margin of 46.47%. This is amongst the best in the industry. APP outperforms 99.29% of its industry peers.
APP's Operating Margin has improved in the last couple of years.
The Gross Margin of APP (77.72%) is better than 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), APP is creating value.
The number of shares outstanding for APP remains at a similar level compared to 1 year ago.
Compared to 5 years ago, APP has less shares outstanding
Compared to 1 year ago, APP has an improved debt to assets ratio.
2.2 Solvency
APP has an Altman-Z score of 16.04. 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 16.04, APP belongs to the top of the industry, outperforming 91.49% of the companies in the same industry.
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 has a better Debt to FCF ratio (1.46) than 70.92% of its industry peers.
APP has a Debt/Equity ratio of 6.10. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of APP (6.10) is worse than 84.04% of its industry peers.
Even though the debt/equity ratio score it not favorable for APP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.1 | ||
| Debt/FCF | 1.46 | ||
| Altman-Z | 16.04 |
ROIC/WACC4.96
WACC8.85%
2.3 Liquidity
A Current Ratio of 1.68 indicates that APP should not have too much problems paying its short term obligations.
APP's Current ratio of 1.68 is in line compared to the rest of the industry. APP outperforms 52.13% of its industry peers.
A Quick Ratio of 1.68 indicates that APP should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.68, APP perfoms like the industry average, outperforming 52.13% of the companies in the same industry.
The current and quick ratio evaluation for APP is rather negative, while it does have 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
The Earnings Per Share has grown by an impressive 262.50% over the past year.
APP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 84.87% yearly.
APP shows a strong growth in Revenue. In the last year, 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
Based on estimates for the next years, APP will show a very strong growth in Earnings Per Share. The EPS will grow by 31.97% on average per year.
Based on estimates for the next years, APP will show a very strong growth in Revenue. The Revenue will grow by 24.93% on average per year.
EPS Next Y80.57%
EPS Next 2Y61.57%
EPS Next 3Y45.72%
EPS Next 5Y31.97%
Revenue Next Year23.17%
Revenue Next 2Y22.27%
Revenue Next 3Y22.83%
Revenue Next 5Y24.93%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 56.10 indicates a quite expensive valuation of APP.
APP's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.45. APP is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 28.82, which means the current valuation is very expensive for APP.
APP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. APP is cheaper than 67.02% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, APP is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.1 | ||
| Fwd PE | 28.82 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, APP is valued a bit cheaper than the industry average as 69.15% of the companies are valued more expensively.
64.18% of the companies in the same industry are more expensive than APP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.64 | ||
| EV/EBITDA | 42.38 |
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.
A more expensive valuation may be justified as APP's earnings are expected to grow with 45.72% in the coming years.
PEG (NY)0.7
PEG (5Y)0.66
EPS Next 2Y61.57%
EPS Next 3Y45.72%
5. Dividend
5.1 Amount
No dividends for APP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
341.64
+5.64 (+1.68%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners72.87%
Inst Owner Change5.67%
Ins Owners4.87%
Ins Owner Change-0.5%
Market Cap115.61B
Analysts81.29
Price Target489.08 (43.16%)
Short Float %4.54%
Short Ratio1.65
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)2.28%
PT rev (3m)-9.21%
EPS NQ rev (1m)37.34%
EPS NQ rev (3m)42.9%
EPS NY rev (1m)17.19%
EPS NY rev (3m)24.06%
Revenue NQ rev (1m)-2.54%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)-2.77%
Revenue NY rev (3m)-2.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.1 | ||
| Fwd PE | 28.82 | ||
| P/S | 22.51 | ||
| P/FCF | 45.64 | ||
| P/OCF | 45.55 | ||
| P/B | 200.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 42.38 |
EPS(TTM)6.09
EY1.78%
EPS(NY)11.85
Fwd EY3.47%
FCF(TTM)7.49
FCFY2.19%
OCF(TTM)7.5
OCFY2.2%
SpS15.18
BVpS1.7
TBVpS-5.67
PEG (NY)0.7
PEG (5Y)0.66
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 | 16.04 |
F-Score8
WACC8.85%
ROIC/WACC4.96
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 Y80.57%
EPS Next 2Y61.57%
EPS Next 3Y45.72%
EPS Next 5Y31.97%
Revenue 1Y (TTM)41.63%
Revenue growth 3Y19.02%
Revenue growth 5Y36.49%
Sales Q2Q%40.25%
Revenue Next Year23.17%
Revenue Next 2Y22.27%
Revenue Next 3Y22.83%
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%