APPLOVIN CORP-CLASS A (APP) Stock Fundamental Analysis
NASDAQ:APP - Nasdaq - US03831W1080 - Common Stock - Currency: USD
APP gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. Both the health and profitability get an excellent rating, making APP a very profitable company, without any liquidiy or solvency issues. APP is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make APP suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year APP was profitable.
APP had a positive operating cash flow in the past year.
In multiple years APP reported negative net income over the last 5 years.
In the past 5 years APP always reported a positive cash flow from operatings.
1.2 Ratios
APP has a better Return On Assets (33.63%) than 98.58% of its industry peers.
APP has a better Return On Equity (333.52%) than 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.
Measured over the past 3 years, the Average Return On Invested Capital for APP is above the industry average of 12.28%.
The 3 year average ROIC (14.51%) for APP is below the current ROIC(43.87%), indicating increased profibility in the last year.
| 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
The Profit Margin of APP (37.37%) is better than 97.52% of its industry peers.
In the last couple of years the Profit Margin of APP has grown nicely.
Looking at the Operating Margin, with a value of 46.47%, APP belongs to the top of the industry, outperforming 99.29% of the companies in the same industry.
APP's Operating Margin has improved in the last couple of years.
APP has a Gross Margin of 77.72%. This is in the better half of the industry: APP outperforms 74.82% 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 | 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.
APP has about the same amout of shares outstanding than it did 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
An Altman-Z score of 15.78 indicates that APP is not in any danger for bankruptcy at the moment.
The Altman-Z score of APP (15.78) is better than 92.20% of its industry peers.
The Debt to FCF ratio of APP is 1.46, which is an excellent value as it means it would take APP, only 1.46 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.46, APP is doing good in the industry, outperforming 70.92% of the companies in the same industry.
APP has a Debt/Equity ratio of 6.10. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 6.10, APP is doing worse than 84.04% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.1 | ||
| Debt/FCF | 1.46 | ||
| Altman-Z | 15.78 |
ROIC/WACC4
WACC10.96%
2.3 Liquidity
APP has a Current Ratio of 1.68. This is a normal value and indicates that APP is financially healthy and should not expect problems in meeting its short term obligations.
APP's Current ratio of 1.68 is in line compared to the rest of the industry. APP outperforms 52.48% of its industry peers.
A Quick Ratio of 1.68 indicates that APP should not have too much problems paying its short term obligations.
APP has a Quick ratio (1.68) which is comparable to the rest of the 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
APP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 262.50%, which is quite impressive.
APP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 84.87% yearly.
Looking at the last year, APP shows a very strong growth in Revenue. The Revenue has grown by 41.63%.
APP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 36.49% yearly.
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
APP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 31.97% yearly.
APP is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 24.93% yearly.
EPS Next Y80.13%
EPS Next 2Y61.24%
EPS Next 3Y46.07%
EPS Next 5Y31.97%
Revenue Next Year22.37%
Revenue Next 2Y22.13%
Revenue Next 3Y22.91%
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
APP is valuated quite expensively with a Price/Earnings ratio of 55.02.
Compared to the rest of the industry, the Price/Earnings ratio of APP is on the same level as its industry peers.
APP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.30.
A Price/Forward Earnings ratio of 28.39 indicates a quite expensive valuation of APP.
Based on the Price/Forward Earnings ratio, APP is valued a bit cheaper than the industry average as 67.02% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.76. APP is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.02 | ||
| Fwd PE | 28.39 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of APP indicates a somewhat cheap valuation: APP is cheaper than 68.09% of the companies listed in the same industry.
APP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. APP is cheaper than 63.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.76 | ||
| EV/EBITDA | 41.59 |
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.
APP has an outstanding profitability rating, which may justify a higher PE ratio.
APP's earnings are expected to grow with 46.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.69
PEG (5Y)0.65
EPS Next 2Y61.24%
EPS Next 3Y46.07%
5. Dividend
5.1 Amount
APP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
335.1
-11.22 (-3.24%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners72.87%
Inst Owner Change0.03%
Ins Owners4.87%
Ins Owner Change-0.5%
Market Cap113.39B
Analysts81.33
Price Target489.08 (45.95%)
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)1.54%
PT rev (3m)-8.02%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)40.13%
EPS NY rev (1m)16.9%
EPS NY rev (3m)23.76%
Revenue NQ rev (1m)-4.56%
Revenue NQ rev (3m)-6.79%
Revenue NY rev (1m)-1.88%
Revenue NY rev (3m)-1.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.02 | ||
| Fwd PE | 28.39 | ||
| P/S | 22.08 | ||
| P/FCF | 44.76 | ||
| P/OCF | 44.68 | ||
| P/B | 197.06 | ||
| P/tB | N/A | ||
| EV/EBITDA | 41.59 |
EPS(TTM)6.09
EY1.82%
EPS(NY)11.8
Fwd EY3.52%
FCF(TTM)7.49
FCFY2.23%
OCF(TTM)7.5
OCFY2.24%
SpS15.18
BVpS1.7
TBVpS-5.67
PEG (NY)0.69
PEG (5Y)0.65
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 | 15.78 |
F-Score8
WACC10.96%
ROIC/WACC4
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 Y80.13%
EPS Next 2Y61.24%
EPS Next 3Y46.07%
EPS Next 5Y31.97%
Revenue 1Y (TTM)41.63%
Revenue growth 3Y19.02%
Revenue growth 5Y36.49%
Sales Q2Q%40.25%
Revenue Next Year22.37%
Revenue Next 2Y22.13%
Revenue Next 3Y22.91%
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%