AppLovin (1APP) AI Stock Analysis

AppLovin

(Milan:1APP)

Rating:―N/A

Action:N/A

Date:―

No summary available

Positive Factors

High-growth profitabilityAppLovin combines accelerating revenue with exceptionally high gross, operating, and net margins. This indicates strong platform economics and substantial operating leverage, giving the company capacity to reinvest in product development, absorb costs, and compound earnings as advertising activity expands.

Negative Factors

Meaningful leverageLeverage has improved substantially but remains meaningful, with debt still exceeding equity. This can reduce financial flexibility if operating performance weakens, increase the importance of sustained cash generation, and constrain the company’s ability to fund investments or capital returns during pressure.

AppLovin (1APP) vs. iShares MSCI Italy ETF (EWI)

Market Cap: EUR 76.76B
Dividend Yield: ―
Average Volume (3M): 222
Price to Earnings (P/E): 17.5
Beta (1Y): 1.17
Revenue Growth: 19.55%
EPS Growth: 77.99%
Country: Italy
Employees: 887
Sector: Communication Services
Sector Strength: 60
Industry: Software - Application

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 markets,...

AppLovin Earnings Call Summary

Earnings Call Date:Aug 04, 2026(Q2-2026)|% Change Since:-43.67%|Next Earnings Date:Nov 03, 2026

Earnings Call SentimentPositive

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.

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 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

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

IT:1APP against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DV	80Outperform	$2.12B	33.07	5.82%	―	7.16%	51.45%
ZETA	78Outperform	$7.82B	-3542.05	-0.26%	―	35.91%	94.31%
U	72Outperform	$16.59B	-27.72	-18.85%	―	13.98%	-27.86%
PUBM	64Neutral	$723.79M	-52.97	-5.41%	―	-1.04%	-710.67%
Sector *	60Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
APPS	53Neutral	$1.08B	-39.27	-14.77%	―	19.24%	60.41%

* Communication Services Sector Average

Performance Comparison

IT:1APP and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
IT:1APP	AppLovin Corp. Class A	208.85	-333.05	-61.46%
APPS	Digital Turbine Inc.	8.87	2.56	40.57%
U	Unity Software, Inc.	37.70	0.15	0.40%
PUBM	Pubmatic Inc	15.89	7.59	91.45%
DV	Doubleverify Holdings, Inc.	13.56	2.34	20.86%
ZETA	Zeta Global Holdings Corp. Class A	31.17	13.55	76.90%

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.

AppLovin AI Stock Analysis