Options selling with Christian
Growth Investor, Options Selling, Creator of Stock Catalysts
AppLovin's selloff on lawsuit news is ridiculous and unwarranted, leaving a higher-risk, high-reward setup. Citi published a bullish report this morning, the average Street price target is around $525, and CEO Adam Foroughi looks top tier. The e-commerce side still needs more research. x.com x.comÂ
AppLovin looks like a solid company lagging badly behind other software names, the only one not catching a bid despite a Rule of 40 score around 140. There are concerns about its growth, its concentration and its struggle to gain traction in new segments, so this is a buy-then-research position with more diligence still to do. x.comÂ
AppLovin's growth, liquidity, free cash flow and profitability make it the clear winner among beaten-down stocks with attractive fundamentals. Research Desk's chart shows EPS generally beating estimates, though the latest revenue missed. x.comÂ
AppLovin looks cheap at current levels unless something catastrophic is happening beneath the surface. Per @stock_analysisx, its EPS rose from $0.09 to $13 in four years while the stock is down 60% from its high at 15x forward earnings. Still, reaching its above-30% annual growth target through Axon recommendation-engine improvements alone seems unlikely. x.com x.comÂ
AppLovin's ad yield engine has run out of gas, setting up the same structural decay that hit The Trade Desk as ad spend consolidates into walled gardens. Conversion rates stalling around 1.4%, delayed AI rollouts and mounting litigation point to a fundamental tailspin that Piper Sandler's cautious call understates. Being down 60% this year is not a bottom; buying here is catching a falling knife on a broken narrative. x.comÂ
AppLovin looks tempting after a massive reset, with some of the strongest fundamentals on the market, in an elite club with Palantir and CrowdStrike. Its price is down 57% from the highs, back to 2024 levels, and its P/E has fallen from 70x to a record-low 24x. Growth has decelerated from priced-for-perfection levels, but it is still a money machine, software-disruption fears are cooling and the stock is consolidating in a long-term support zone. The bottom is likely close. x.com x.com x.comÂ
AppLovin looks cheap for its growth, at just 15 times forward earnings after 61% growth over the last twelve months. More marketers have lately mentioned AppLovin as a place they want to spend, though the stock is a controversial pick. x.comÂ
AppLovin is probably stuck for a while after falling more than 50% this year, partly penalized unfairly for The Trade Desk's fall as a fellow black-box ad-tech name. Too few holders understood the business on the way up, which makes the way down painful. It may become a good long in 2027, pending more work on valuation. x.comÂ
AppLovin's high growth may outlast market expectations, helping explain its cheap valuation. In SergeyCYW's forward P/E versus expected revenue growth comparison, it is in a league of its own, especially when earnings quality is considered. x.com x.com x.comÂ
AppLovin is still a Moderate Buy, and for those with conviction in the thesis this is a good time to buy, though it will be a tough one to hold. Down 15% in a week, it could get stuck like Adobe for many quarters ahead. x.com x.comÂ
AppLovin is $200 cheaper and insiders still don't want to buy it. x.comÂ
AppLovin looks cheap at about 22x forward earnings, down 57% from its high, while growth and cash flow stay strong. Revenue grew 53% to $1.92B with an 84% EBITDA margin and $863M of quarterly free cash flow. The SEC closed its inquiry with no action, e-commerce advertiser spend hit a record, and model improvements after Q2 are driving a strong Q3 start. It bought back $551M of stock last quarter, with $1.8B still authorized. x.comÂ
