Past performance does not predict future results. Informational only, not investment advice.
The company is growing revenue, printing cash, and building a strong AI-driven advertising platform. After a pullback, the risk/reward setup is attractive, and if growth holds and sentiment turns, the stock could see significant upside.
APPLOVIN appears attractively priced despite being more speculative than UBER and BOOKING. Growth continuation will be key to validation of the investment thesis.
Author is deploying 500K+ into APP and holding through earnings, signaling conviction in upside.
Stock has sold off on lawsuit setback but fundamentals remain strong: 30% projected 5-year CAGR, high-80s margins, 50%+ revenue growth, and positive free cash flow generation. Q3 should be seasonally strong, and Cramer's bearish call is contrarian.
Applovin's stock fell 35% post-earnings despite 50%+ revenue and net profit growth due to market pessimism on SaaS valuations. The author's DCF analysis indicates 45-50% undervaluation, suggesting significant upside as fundamentals improve and sentiment normalizes.
AppLovin's $110b market cap prices in $35b of value from unproven adjacent markets (non-gaming apps, open web, connected TV) where it has no competitive advantage against entrenched players like Google, Meta, and TikTok. Revenue growth is now driven entirely by higher ad prices rather than volume, and management's expectation of sustained 20-30% growth requires implausibly large market share gains, making the stock fairly valued to overvalued at current levels.
AppLovin is growing 60% year-over-year and is no longer priced for perfection after the recent selloff. The author initiated a 5% position at $303, viewing the falling-knife narrative as an overreaction that presents a value opportunity.
AppLovin is undervalued relative to its AI business quality and cash generation. The company grows revenue 50% YoY, reduces share count quarterly through $4B+ in buybacks, requires minimal CapEx, and generates strong cash flow when stripping out stock-based compensation—metrics that rival Mag7 companies but at a fraction of their valuation.
Author is bullish on AppLovin ahead of earnings, expecting a significant move higher. The position was established before earnings with anticipation of a positive print.
APP offers cleaner exposure to the performance ads and AI growth trend demonstrated by strong results from Meta, Reddit, and Zeta. The author holds multiple call spreads positioned for May earnings, expecting guidance to remain robust and ad spending momentum to continue.
End of results.