We assign a fundamental rating of 7 out of 10 to APP. APP was compared to 278 industry peers in the Software industry. APP has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. APP is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes APP very considerable for growth and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
In the past 5 years APP always reported a positive cash flow from operatings.

1.2 Ratios

APP's Return On Assets of 44.61% is amongst the best of the industry. APP outperforms 99.28% of its industry peers.
The Return On Equity of APP (191.99%) is better than 99.64% of its industry peers.
The Return On Invested Capital of APP (52.42%) is better than 98.92% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for APP is above the industry average of 10.73%.
The 3 year average ROIC (14.51%) for APP is below the current ROIC(52.42%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	44.61%
ROE	191.99%
ROIC	52.42%

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 Profit Margin of 51.26%. This is amongst the best in the industry. APP outperforms 93.53% of its industry peers.
In the last couple of years the Profit Margin of APP has grown nicely.
APP has a Operating Margin of 63.35%. This is amongst the best in the industry. APP outperforms 97.84% of its industry peers.
APP's Operating Margin has improved in the last couple of years.
APP's Gross Margin of 83.31% is amongst the best of the industry. APP outperforms 88.85% of its industry peers.
In the last couple of years the Gross Margin of APP has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	63.35%
PM (TTM)	51.26%
GM	83.31%

OM growth 3Y94.93%

OM growth 5Y15.27%

PM growth 3Y209%

PM growth 5Y34.24%

GM growth 3Y5.19%

GM growth 5Y-0.13%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so APP is creating value.
Compared to 1 year ago, APP has about the same amount of shares outstanding.
The number of shares outstanding for APP has been reduced compared to 5 years ago.
APP has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 23.08 indicates that APP is not in any danger for bankruptcy at the moment.
APP has a Altman-Z score of 23.08. This is amongst the best in the industry. APP outperforms 97.12% of its industry peers.
APP has a debt to FCF ratio of 1.03. This is a very positive value and a sign of high solvency as it would only need 1.03 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.03, APP is doing good in the industry, outperforming 74.46% of the companies in the same industry.
A Debt/Equity ratio of 2.38 is on the high side and indicates that APP has dependencies on debt financing.
The Debt to Equity ratio of APP (2.38) is worse than 83.45% 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 Rank	Sector Rank
Debt/Equity	2.38
Debt/FCF	1.03
Altman-Z	23.08

ROIC/WACC4.73

WACC11.09%

2.3 Liquidity

APP has a Current Ratio of 3.25. This indicates that APP is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 3.25, APP is in the better half of the industry, outperforming 76.98% of the companies in the same industry.
APP has a Quick Ratio of 3.25. This indicates that APP is financially healthy and has no problem in meeting its short term obligations.
APP has a Quick ratio of 3.25. This is in the better half of the industry: APP outperforms 76.98% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.25
Quick Ratio	3.25

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 166.36% over the past year.
Measured over the past years, APP shows a very strong growth in Earnings Per Share. The EPS has been growing by 84.83% on average per year.
Looking at the last year, APP shows a very strong growth in Revenue. The Revenue has grown by 40.81%.
APP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 36.49% yearly.

EPS 1Y (TTM)166.36%

EPS 3Y269.22%

EPS 5Y84.83%

EPS Q2Q%96%

Revenue 1Y (TTM)40.81%

Revenue growth 3Y19.02%

Revenue growth 5Y36.49%

Sales Q2Q%17.26%

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 44.45% on average per year.
APP is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 27.22% yearly.

EPS Next Y107.83%

EPS Next 2Y80.05%

EPS Next 3Y62.52%

EPS Next 5Y44.45%

Revenue Next Year24.01%

Revenue Next 2Y30.35%

Revenue Next 3Y29.22%

Revenue Next 5Y27.22%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 53.82 indicates a quite expensive valuation of APP.
The rest of the industry has a similar Price/Earnings ratio as APP.
When comparing the Price/Earnings ratio of APP to the average of the S&P500 Index (28.32), we can say APP is valued expensively.
A Price/Forward Earnings ratio of 32.15 indicates a quite expensive valuation of APP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of APP is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 25.57. APP is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	53.82
Fwd PE	32.15

4.2 Price Multiples

60.79% of the companies in the same industry are more expensive than APP, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of APP is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	47.05
EV/EBITDA	42.71

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.
The excellent profitability rating of APP may justify a higher PE ratio.
APP's earnings are expected to grow with 62.52% in the coming years. This may justify a more expensive valuation.