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AppLovin
(NASDAQ:APP)
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Rating:72Outperform
Price Target:
$293.00
▼(-1.87% Downside)
Action:Reiterated
Date:08/07/26
The score is driven primarily by very strong profitability and cash flow, reinforced by upbeat Q3 guidance and continued high-margin outlook. This is tempered by clearly bearish technicals (price well below key moving averages with negative MACD) and a premium P/E with no dividend yield, which increases sensitivity to execution and model-timing/cost risks.
Positive Factors
Exceptional profitability and cash generation
AppLovin’s unusually high margins and substantial free cash flow show that its software platform converts revenue into earnings and liquidity efficiently. This supports internal funding for product development, resilience through industry cycles, and continued investment without relying solely on external capital.
Negative Factors
Meaningful balance-sheet leverage
Leverage has improved materially but remains meaningful relative to equity, which can amplify financial outcomes if operating performance weakens. Debt obligations may also constrain flexibility for acquisitions, investment, or shareholder returns during periods of slower growth or higher funding costs.
Read all positive and negative factors
Positive Factors
Negative Factors
Exceptional profitability and cash generation
AppLovin’s unusually high margins and substantial free cash flow show that its software platform converts revenue into earnings and liquidity efficiently. This supports internal funding for product development, resilience through industry cycles, and continued investment without relying solely on external capital.
Read all positive factors
AppLovin Key Performance Indicators (KPIs)
Any
Adjusted EBITDA by Segment
Shows profitability across different business units, highlighting which segments are driving earnings and where there might be opportunities or challenges in cost management.
Shows profitability across different business units, highlighting which segments are driving earnings and where there might be opportunities or challenges in cost management.
Data provided by:
The Fly
The FlyAppLovin (APP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$89.65B
Dividend YieldN/A
Average Volume (3M)4.86M
Price to Earnings (P/E)20.5
Beta (1Y)3.34
Revenue Growth28.52%
EPS Growth90.65%
CountryUS
Employees887
SectorCommunication Services
Sector Strength97
IndustrySoftware - Application
Share Statistics
EPS (TTM)13.07
Shares Outstanding304,443,000
10 Day Avg. Volume3,731,303
30 Day Avg. Volume4,862,532
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)106.94
Price to Sales (P/S)41.65
P/FCF Ratio57.90
Enterprise Value/Market Cap1.94
Enterprise Value/Revenue25.50
Enterprise Value/Gross Profit28.82
Enterprise Value/Ebitda31.37
Forecast
1Y Price Target
$484.30Price Target Upside62.20% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering21
EPS Forecast (FY)15.74
Revenue Forecast (FY)$8.12B
AppLovin Business Overview & Revenue Model
Company Description
AppLovin Corporation provides a specialized software platform focused on empowering mobile application developers to enhance the marketing and revenue generation of their products. With operations spanning the United States and international marke...
How the Company Makes Money
AppLovin primarily makes money by providing advertising technology that enables advertisers to buy mobile app advertising inventory and enables app publishers (developers) to monetize their apps. Its key revenue streams are: (1) Advertising revenu...
AppLovin Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial picture: very strong year-over-year revenue and adjusted EBITDA growth, high margins, substantial free cash flow, a clean resolution to an SEC inquiry, and explicit momentum in the consumer vertical and product launch. However, management acknowledged near-term execution friction — principally the timing of model uplifts that caused results to fall slightly below internal expectations, higher compute costs, temporary free cash flow timing issues, and product bottlenecks around creative and self-service onboarding. The company provided confident Q3 guidance and noted that the key model improvements are now live, supporting a reacceleration narrative.Positive Updates
Strong Revenue Growth
Second quarter revenue of $1.92 billion, up 53% year-over-year and up 4% sequentially; result was just below the midpoint of guidance but still demonstrates high growth across the business.
Negative Updates
Missed Internal Expectations This Quarter
Company acknowledged revenue and adjusted EBITDA landed just below the midpoint of guidance and below internal standards, attributing the shortfall to the timing of model uplifts rather than demand weakness.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth
Second quarter revenue of $1.92 billion, up 53% year-over-year and up 4% sequentially; result was just below the midpoint of guidance but still demonstrates high growth across the business.
Read all positive updates
Company Guidance
AppLovin guided Q3 revenue of $2.055–$2.085 billion (≈46%–48% YoY, ≈7%–8% sequential) and adjusted EBITDA of $1.71–$1.74 billion (≈48%–50% YoY) implying an adjusted EBITDA margin of ~83%; the outlook incorporates model improvements already live, higher training/inference compute costs (management noted roughly $0.10 of compute per incremental dollar of revenue) and explicitly excludes additional model releases not yet deployed. For context, Q2 actuals were $1.92 billion revenue (+53% YoY, +4% QoQ) and $1.61 billion adjusted EBITDA (+58% YoY, margins +~300 bps, 70% QoQ flow‑through), free cash flow of $863 million (conversion expected to normalize to ~75% of adjusted EBITDA for the full year), ending cash of $3.05 billion vs. $3.7 billion total debt (net leverage ≈0.1x TTM adj. EBITDA), 335 million shares outstanding after repurchasing ~1.14 million shares for $551 million with ~$1.8 billion remaining authorization, and management reiterated a long‑term growth view of roughly 30% annual compounding.AppLovin Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
68
Positive
Cash Flow
95
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.83B | 5.48B | 3.22B | 1.84B | 2.82B | 2.79B |
| Gross Profit | 6.04B | 4.82B | 2.70B | 1.49B | 1.56B | 1.81B |
| EBITDA | 5.55B | 4.35B | 2.38B | 1.26B | 513.77M | 580.54M |
| Net Income | 4.41B | 3.33B | 1.58B | 357.21M | -192.75M | 35.45M |
Balance Sheet | ||||||
| Total Assets | 8.27B | 7.26B | 5.87B | 5.36B | 5.85B | 6.16B |
| Cash, Cash Equivalents and Short-Term Investments | 3.05B | 2.49B | 741.41M | 502.15M | 1.08B | 1.52B |
| Total Debt | 3.52B | 3.54B | 3.56B | 3.18B | 3.28B | 3.33B |
| Total Liabilities | 5.11B | 5.12B | 4.78B | 4.10B | 3.95B | 4.03B |
| Stockholders Equity | 3.16B | 2.13B | 1.09B | 1.26B | 1.90B | 2.14B |
Cash Flow | ||||||
| Free Cash Flow | 4.50B | 3.94B | 2.09B | 1.06B | 412.11M | 360.46M |
| Operating Cash Flow | 4.53B | 3.97B | 2.10B | 1.06B | 412.77M | 361.85M |
| Investing Cash Flow | -72.53M | 402.81M | -106.75M | -77.83M | -1.37B | -1.21B |
| Financing Cash Flow | -2.64B | -2.59B | -1.75B | -1.56B | -526.85M | 3.11B |
AppLovin Technical Analysis
Negative
298.59
Price Trends
300.99
Negative
381.10
Negative
427.39
Negative
Market Momentum
-12.81
Negative
37.31
Neutral
33.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APP, the sentiment is Negative. The current price of 298.59 is above the 20-day moving average (MA) of 279.42, below the 50-day MA of 300.99, and below the 200-day MA of 427.39, indicating a bearish trend. The MACD of -12.81 indicates Negative momentum. The RSI at 37.31 is Neutral, neither overbought nor oversold. The STOCH value of 33.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for APP.
AppLovin Risk Analysis
AppLovin disclosed 47 risk factors in its most recent earnings report. AppLovin reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AppLovin Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $8.56B | -3,876.14 | -0.26% | ― | 35.91% | 94.31% | |
74 Outperform | $2.12B | 36.65 | 5.37% | 1.00% | 7.64% | 17.54% | |
72 Outperform | $89.65B | 20.50 | 193.10% | ― | 28.52% | 90.65% | |
72 Outperform | $795.30M | -58.20 | -5.41% | ― | -1.04% | -710.67% | |
67 Neutral | $18.14B | -30.30 | -18.85% | ― | 13.98% | -27.86% | |
61 Neutral | $1.19B | -46.08 | -14.77% | ― | 19.24% | 60.41% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
APP
AppLovin
264.28
-355.72
-57.37%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.