APP

AppLovin

Fundamental data last updated:April 13, 2026

company profile

SECTOR

Communication Services

industry

Advertising Agencies

Exchange

Nasdaq

County of HQ

United States

Next Earnings Date

05/06/26

Business Summary

AppLovin operates a technology-driven advertising platform that connects advertisers with mobile app publishers, monetizing through performance-based ad placement and software tools. The company generates cash by taking a spread on ad spend and leveraging its platform to optimize user acquisition and in-app monetization for developers. Its moat is rooted in data scale, algorithmic optimization, and embedded software integrations that make switching costly for app developers reliant on performance marketing efficiency. High returns on invested capital indicate that once integrated, the platform compounds value with limited incremental capital, reinforcing network effects and operating leverage.

VALUATION

P/E

38.9

Market Cap ($M USD)

$132,003

Forward P/E

19

PEG

-

PRICE TO SALES

24.5

PRICE TO BOOK

61.7

EV / EBITDA

30.6

5-Year Average P/E

DIVIDEND

Yield

-

Annual Payout

-

Payout Ratio

-

Consecutive Years of Dividend Growth

0

5-Year Dividend Growth Rate

-

Financial Health & Profitability

Earnings Per Share

$10.13

Next Year EPS Growth Estimate

$20.60

Next Year Revenue Growth Estimate

29.10%

Return on Equity (ROE)

156.20%

Operating Margin

75.80%

Debt-to-Equity

1.7

Piotroski F-Score

8

Altman Z-Score

18.9

Return on Invested Capital (ROIC)

68.10%%

Current Ratio

3.3

Quick Ratio

Gainseekers Quantitative Analysis

Summary

At 38.9x trailing earnings but only 19x forward earnings, the market is aggressively discounting a sharp earnings normalization despite an Altman Z-Score of 18.9 signaling extremely low bankruptcy risk. A ROIC of 68.10% paired with a 29.10% return on equity and a Piotroski F-Score of 8 indicates elite capital efficiency and strong financial momentum, yet the multiple has compressed materially on forward expectations. The balance sheet strength (Current Ratio 3.3) combined with a reasonable forward valuation suggests the stock is priced more like a cyclical operator than a structurally dominant platform. This disconnect between profitability metrics and valuation multiple implies the market may be underpricing durability while overemphasizing near-term earnings volatility.

AI Exposure / Tech Reliance

As an Advertising Agencies company within Communication Services, APP sits directly in the path of AI-driven ad optimization and performance targeting. The industry’s shift toward automated bidding, predictive analytics, and machine-driven user acquisition structurally favors scaled digital ad platforms. Companies that integrate AI into campaign optimization can expand margins and deepen advertiser lock-in, reinforcing tech resilience.

The Bull Case

A GARP investor buys this because the numbers scream operational dominance. A 68.10% ROIC is extraordinary and indicates the company reinvests capital at highly accretive rates, while a 156.20% operating margin suggests immense operating leverage embedded in the model. The Piotroski F-Score of 8 confirms strong financial health and improving fundamentals, and a Current Ratio of 3.3 eliminates liquidity concerns. Despite these strengths, the forward P/E of 19 is modest relative to the profitability profile, creating a rare setup where high returns on capital meet a valuation that does not fully reflect them.

The Bear Case

There are structural inconsistencies that cannot be ignored. Debt to Equity of 75.80% introduces leverage risk, particularly in an advertising-driven revenue model that can be cyclical. The absence of a PEG Forward ratio removes visibility into growth-adjusted valuation, and missing Short % of Float data obscures sentiment risk. Additionally, the dramatic shift from EPS of 30.6 to an estimated 10.13 next year signals a steep earnings compression, which may justify the market’s caution and could mean the trailing metrics overstate sustainable profitability.

Market Sentiment & Smart Money

Short Interest %

4.50%

Analyst Consensus

1.41

Average Analyst Price Target

$667.04

Institutional Ownership %

81.10%

1-Year Beta

2.27

Insider Buying % (6 Mo)

18.60%%

Distance to 52-Week High

52.50%%

Distance to 52-Week Low

176.30%%