APPLOVIN CORP-CLASS A (APP) Stock Fundamental Analysis
NASDAQ:APP - Nasdaq - US03831W1080 - Common Stock - Currency: USD
Taking everything into account, APP scores 7 out of 10 in our fundamental rating. APP was compared to 283 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. With these ratings, APP could be worth investigating further 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
Looking at the Return On Assets, with a value of 33.63%, APP belongs to the top of the industry, outperforming 98.23% of the companies in the same industry.
APP has a Return On Equity of 333.52%. This is amongst the best in the industry. APP outperforms 100.00% of its industry peers.
The Return On Invested Capital of APP (43.87%) 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 12.21%.
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
APP has a better Profit Margin (37.37%) than 96.47% of its industry peers.
APP's Profit Margin has improved in the last couple of years.
APP has a better Operating Margin (46.47%) than 99.29% of its industry peers.
APP's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 77.72%, APP is in the better half of the industry, outperforming 74.91% of the companies in the same industry.
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.
APP has about the same amout of shares outstanding than it did 1 year ago.
APP has less shares outstanding than it did 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 16.70. This indicates that APP is financially healthy and has little risk of bankruptcy at the moment.
APP has a Altman-Z score of 16.70. This is amongst the best in the industry. APP outperforms 92.23% 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.
Looking at the Debt to FCF ratio, with a value of 1.46, APP is in the better half of the industry, outperforming 70.32% of the companies in the same industry.
A Debt/Equity ratio of 6.10 is on the high side and indicates that APP has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 6.10, APP is doing worse than 84.45% 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 | 16.7 |
ROIC/WACC4
WACC10.97%
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 has a Current ratio of 1.68. This is comparable to the rest of the industry: APP outperforms 51.94% of its industry peers.
APP has a Quick 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.
With a Quick ratio value of 1.68, APP perfoms like the industry average, outperforming 51.94% of the companies in the same industry.
APP does not score too well on the current and quick ratio evaluation. However, as it has 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.
The Earnings Per Share has been growing by 84.87% on average over the past years. This is a very strong growth
APP shows a strong growth in Revenue. In the last year, the Revenue has grown by 41.63%.
Measured over the past years, APP shows a very strong growth in Revenue. The Revenue has been growing by 36.49% on average per year.
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 27.00% on average per year.
Based on estimates for the next years, APP will show a quite strong growth in Revenue. The Revenue will grow by 18.31% on average per year.
EPS Next Y54.09%
EPS Next 2Y55.53%
EPS Next 3Y45.51%
EPS Next 5Y27%
Revenue Next Year26.68%
Revenue Next 2Y24.17%
Revenue Next 3Y24.44%
Revenue Next 5Y18.31%
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.
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
A Price/Earnings ratio of 59.21 indicates a quite expensive valuation of APP.
The rest of the industry has a similar Price/Earnings ratio as APP.
Compared to an average S&P500 Price/Earnings ratio of 26.03, APP is valued quite expensively.
With a Price/Forward Earnings ratio of 32.83, APP can be considered very expensive at the moment.
APP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. APP is cheaper than 61.84% of the companies in the same industry.
APP's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.21 | ||
| Fwd PE | 32.83 |
4.2 Price Multiples
APP's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. APP is cheaper than 68.20% of the companies in the same industry.
APP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 48.16 | ||
| EV/EBITDA | 44.4 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 45.51% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.09
PEG (5Y)0.7
EPS Next 2Y55.53%
EPS Next 3Y45.51%
5. Dividend
5.1 Amount
APP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:APP (5/22/2025, 12:23:06 PM)
360.592
+2.24 (+0.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners69.77%
Inst Owner Change5.4%
Ins Owners4.11%
Ins Owner Change-1.29%
Market Cap122.01B
Analysts81.29
Price Target478.18 (32.61%)
Short Float %4.25%
Short Ratio1.07
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)-10.08%
PT rev (3m)28.38%
EPS NQ rev (1m)-0.71%
EPS NQ rev (3m)-6.24%
EPS NY rev (1m)5.14%
EPS NY rev (3m)8.62%
Revenue NQ rev (1m)1.27%
Revenue NQ rev (3m)2.07%
Revenue NY rev (1m)2.1%
Revenue NY rev (3m)2.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.21 | ||
| Fwd PE | 32.83 | ||
| P/S | 23.76 | ||
| P/FCF | 48.16 | ||
| P/OCF | 48.07 | ||
| P/B | 212.04 | ||
| P/tB | N/A | ||
| EV/EBITDA | 44.4 |
EPS(TTM)6.09
EY1.69%
EPS(NY)10.98
Fwd EY3.05%
FCF(TTM)7.49
FCFY2.08%
OCF(TTM)7.5
OCFY2.08%
SpS15.18
BVpS1.7
TBVpS-5.67
PEG (NY)1.09
PEG (5Y)0.7
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 | 16.7 |
F-Score8
WACC10.97%
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 Y54.09%
EPS Next 2Y55.53%
EPS Next 3Y45.51%
EPS Next 5Y27%
Revenue 1Y (TTM)41.63%
Revenue growth 3Y19.02%
Revenue growth 5Y36.49%
Sales Q2Q%40.25%
Revenue Next Year26.68%
Revenue Next 2Y24.17%
Revenue Next 3Y24.44%
Revenue Next 5Y18.31%
EBIT growth 1Y157.5%
EBIT growth 3Y132.02%
EBIT growth 5Y57.32%
EBIT Next Year107.53%
EBIT Next 3Y48.65%
EBIT Next 5Y11.34%
FCF growth 1Y248.78%
FCF growth 3Y80.45%
FCF growth 5Y60.75%
OCF growth 1Y246.17%
OCF growth 3Y79.67%
OCF growth 5Y60.27%