APPLOVIN CORP-CLASS A (APP) Stock Fundamental Analysis
NASDAQ:APP - Nasdaq - US03831W1080 - Common Stock - Currency: USD
APP gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 283 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 overvalued while it is showing excellent growth. This is an interesting combination. These ratings could make APP a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
APP had positive earnings in the past year.
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
With an excellent Return On Assets value of 40.75%, APP belongs to the best of the industry, outperforming 99.29% of the companies in the same industry.
The Return On Equity of APP (208.08%) is better than 100.00% of its industry peers.
The Return On Invested Capital of APP (47.95%) is better than 98.94% of its industry peers.
The Average Return On Invested Capital over the past 3 years for APP is above the industry average of 12.14%.
The last Return On Invested Capital (47.95%) for APP is above the 3 year average (14.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 40.75% | ||
| ROE | 208.08% | ||
| ROIC | 47.95% |
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 45.70%. This is amongst the best in the industry. APP outperforms 95.05% of its industry peers.
In the last couple of years the Profit Margin of APP has grown nicely.
With an excellent Operating Margin value of 55.57%, APP belongs to the best of the industry, outperforming 97.53% of the companies in the same industry.
APP's Operating Margin has improved in the last couple of years.
The Gross Margin of APP (80.87%) is better than 83.39% 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 | 55.57% | ||
| PM (TTM) | 45.7% | ||
| GM | 80.87% |
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.
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.
The debt/assets ratio for APP has been reduced compared to a year ago.
2.2 Solvency
APP has an Altman-Z score of 21.44. 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 21.44, APP belongs to the top of the industry, outperforming 93.64% of the companies in the same industry.
APP has a debt to FCF ratio of 1.21. This is a very positive value and a sign of high solvency as it would only need 1.21 years to pay back of all of its debts.
APP has a better Debt to FCF ratio (1.21) than 73.14% of its industry peers.
APP has a Debt/Equity ratio of 3.01. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 3.01, APP is not doing good in the industry: 82.33% of the companies in the same industry are doing better.
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 | 3.01 | ||
| Debt/FCF | 1.21 | ||
| Altman-Z | 21.44 |
ROIC/WACC4.17
WACC11.5%
2.3 Liquidity
A Current Ratio of 2.74 indicates that APP has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.74, APP is doing good in the industry, outperforming 74.20% of the companies in the same industry.
APP has a Quick Ratio of 2.74. This indicates that APP is financially healthy and has no problem in meeting its short term obligations.
APP's Quick ratio of 2.74 is fine compared to the rest of the industry. APP outperforms 74.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.74 | ||
| Quick Ratio | 2.74 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 222.98% 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 84.87% on average per year.
Looking at the last year, APP shows a very strong growth in Revenue. The Revenue has grown by 34.33%.
APP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 36.49% yearly.
EPS 1Y (TTM)222.98%
EPS 3Y269.34%
EPS 5Y84.87%
EPS Q2Q%168.54%
Revenue 1Y (TTM)34.33%
Revenue growth 3Y19.02%
Revenue growth 5Y36.49%
Sales Q2Q%16.54%
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.
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 Year21.34%
Revenue Next 2Y21.42%
Revenue Next 3Y22.2%
Revenue Next 5Y24.93%
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 57.80, which means the current valuation is very expensive for APP.
APP's Price/Earnings is on the same level as the industry average.
APP is valuated expensively when we compare the Price/Earnings ratio to 26.93, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 37.17 indicates a quite expensive valuation of APP.
The rest of the industry has a similar Price/Forward Earnings ratio as APP.
APP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 35.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.8 | ||
| Fwd PE | 37.17 |
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 64.66% of the companies listed in the same industry.
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 | 51.27 | ||
| EV/EBITDA | 45.04 |
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 46.07% in the coming years.
PEG (NY)0.72
PEG (5Y)0.68
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 |
438.68
+5.34 (+1.23%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners73.15%
Inst Owner Change-1.15%
Ins Owners4.87%
Ins Owner Change-0.5%
Market Cap148.44B
Analysts81.33
Price Target490.88 (11.9%)
Short Float %4.3%
Short Ratio1.91
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)34.04%
Min EPS beat(2)16.63%
Max EPS beat(2)51.45%
EPS beat(4)4
Avg EPS beat(4)35.03%
Min EPS beat(4)16.63%
Max EPS beat(4)51.45%
EPS beat(8)8
Avg EPS beat(8)27.58%
EPS beat(12)9
Avg EPS beat(12)-18.56%
EPS beat(16)9
Avg EPS beat(16)-67.65%
Revenue beat(2)1
Avg Revenue beat(2)2.17%
Min Revenue beat(2)-1.89%
Max Revenue beat(2)6.23%
Revenue beat(4)3
Avg Revenue beat(4)4.19%
Min Revenue beat(4)-1.89%
Max Revenue beat(4)7.5%
Revenue beat(8)6
Avg Revenue beat(8)4.01%
Revenue beat(12)9
Avg Revenue beat(12)2.88%
Revenue beat(16)11
Avg Revenue beat(16)0.88%
PT rev (1m)0.37%
PT rev (3m)2.66%
EPS NQ rev (1m)2.39%
EPS NQ rev (3m)43.48%
EPS NY rev (1m)0%
EPS NY rev (3m)22.91%
Revenue NQ rev (1m)-2.66%
Revenue NQ rev (3m)-9.26%
Revenue NY rev (1m)-0.84%
Revenue NY rev (3m)-2.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.8 | ||
| Fwd PE | 37.17 | ||
| P/S | 27.94 | ||
| P/FCF | 51.27 | ||
| P/OCF | 51.19 | ||
| P/B | 127.19 | ||
| P/tB | N/A | ||
| EV/EBITDA | 45.04 |
EPS(TTM)7.59
EY1.73%
EPS(NY)11.8
Fwd EY2.69%
FCF(TTM)8.56
FCFY1.95%
OCF(TTM)8.57
OCFY1.95%
SpS15.7
BVpS3.45
TBVpS-2.42
PEG (NY)0.72
PEG (5Y)0.68
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 40.75% | ||
| ROE | 208.08% | ||
| ROCE | 60.69% | ||
| ROIC | 47.95% | ||
| ROICexc | 63.51% | ||
| ROICexgc | 138.41% | ||
| OM | 55.57% | ||
| PM (TTM) | 45.7% | ||
| GM | 80.87% | ||
| FCFM | 54.49% |
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-Score9
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.01 | ||
| Debt/FCF | 1.21 | ||
| Debt/EBITDA | 1.06 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 13.11 | ||
| Cash Conversion | 87.68% | ||
| Profit Quality | 119.22% | ||
| Current Ratio | 2.74 | ||
| Quick Ratio | 2.74 | ||
| Altman-Z | 21.44 |
F-Score9
WACC11.5%
ROIC/WACC4.17
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)222.98%
EPS 3Y269.34%
EPS 5Y84.87%
EPS Q2Q%168.54%
EPS Next Y80.13%
EPS Next 2Y61.24%
EPS Next 3Y46.07%
EPS Next 5Y31.97%
Revenue 1Y (TTM)34.33%
Revenue growth 3Y19.02%
Revenue growth 5Y36.49%
Sales Q2Q%16.54%
Revenue Next Year21.34%
Revenue Next 2Y21.42%
Revenue Next 3Y22.2%
Revenue Next 5Y24.93%
EBIT growth 1Y148.91%
EBIT growth 3Y132.02%
EBIT growth 5Y57.32%
EBIT Next Year127.57%
EBIT Next 3Y54.45%
EBIT Next 5Y39.49%
FCF growth 1Y242.92%
FCF growth 3Y80.45%
FCF growth 5Y60.75%
OCF growth 1Y238.73%
OCF growth 3Y79.67%
OCF growth 5Y60.27%