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AppLovin Corp

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AppLovin Corp AI Insights

Informational only. Not investment advice.
As of 2025-12-08

Snapshot

  • EPS 3Y CAGR of 244% vs industry median 10% - exceptional margin expansion driving earnings leverage far beyond revenue growth.[EPS Growth 3Y]
  • Operating margin TTM 55% vs industry median 0% - software economics with near-zero marginal costs creating structural profit advantage.[Operating Margin TTM]
  • FCF TTM 3.4B (53% margin) with debt/equity 2.4x - generating cash faster than debt service despite leveraged balance sheet.[Free Cash Flow TTM]

Watch Triggers

  • Operating Margin TTM: Falls below 45%10pt margin compression would cut EPS 20%+ and invalidate premium multiple thesis.
  • Free Cash Flow TTM: FCF/Net Income falls below 100%Signals working capital reversal or rising capex - removes self-funding advantage.
  • Total Revenue TTM: Growth decelerates below 20% YoYAt 81x P/E, growth deceleration triggers multiple compression before earnings impact.

Bull Case

ROE TTM 235% and ROIC 60% indicate capital efficiency rarely seen - each dollar invested generates 60 cents annually in returns.

ROE TTMROIC TTMAsset Turnover TTM

FCF conversion 119% of net income (3.35B vs 2.83B) with working capital 2.4B - self-funding growth without dilution.

Free Cash Flow TTMWorking CapitalNet Income TTM

Bear Case

P/E 81x and P/S 37x price in perfection - 3x industry P/E median with no margin of safety if growth decelerates.

PE RatioPS Ratio

Debt 3.5B at 2.4x equity with negative tangible book - refinancing risk if rates stay elevated or EBITDA compresses.

Total DebtDebt to EquityTangible Book Value

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
55%

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Forward Thesis

FCF will exceed 4B within 12 months as AXON AI scales with minimal incremental cost.

3-12mhigh
  • 53% FCF margin on 6.3B revenue with fixed cost base
  • R&D at 8% of revenue - AI model already built
  • Capex under 5M TTM - asset-light scaling
FCF TTM 3.35B on 6.3B revenueOperating margin 55% vs 45% net marginCash flow 3.36B vs net income 2.83B

Goodwill impairment risk if ad-tech market share erodes - 105% of equity at risk.

1-3ymed
  • Goodwill 1.5B vs equity 1.5B
  • Tangible book value negative 489M
  • Acquisition-driven growth model
Goodwill/equity ratio 105%Negative tangible book valueTotal intangibles 2.0B

Valuation Context

Caveats

Data Partners
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Fundamental company data provided by Morningstar, updated daily.

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