Jonah Lupton
CEO & CIO of FirstWave Capital, Long-Biased Growth
AppLovin is a growth company priced like a value stock as its ecommerce business accelerates. AXON pixel growth rose from 1–3% week over week after the summer launch to 5.1% and then 11.7%, up 25% month over month, as a deliberately slow ramp let it tune models before the holidays. Revenue growth could reach 51–52% in 2026 and 35–40% in 2027, above sell-side estimates of 47.8% and 26.7%. On those numbers, with flat margins, it trades at 13.5x 2027 EPS. x.com
AppLovin's AXON ecommerce platform is accelerating into the holiday season, so anyone writing off its ecommerce opportunity may need to rethink. Per Store Leads data cited by @bily5260, AXON pixel installs rose 11.74% week over week, from 13,105 to 14,644. The summer launch was likely timed for a slower period to work out kinks and tweak models; now AppLovin is hitting the accelerator, and weekly gains could grow as ecommerce brands spend more near peak holiday shopping. x.com x.com
AppLovin is dirt cheap at roughly 13-15x 2027 EBIT, with the market treating it like a dying gaming ad company and ignoring its e-commerce potential. Rising AXON Pixel data shows the e-commerce story is not priced in, while the full bear case is. Buybacks make the multiple a few percent cheaper still, and growth could accelerate within the next year. The long requires high conviction and trust in management to succeed in new segments. x.com x.com x.com
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.com
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.com
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.com
AppLovin's downside looks limited at about 17x CY27 EBITDA, per BofA, since gaming alone can still grow 20%+ a year. The upside now hinges on e-commerce: new pixel additions slowed from 950 to 750 in June, and early data after the platform opened to all advertisers on June 22 shows no meaningful acceleration. July and August pixel data, plus e-commerce revenue and advertiser count in the August report, are key. Without acceleration, the stock may stay cheap but lack a catalyst. x.com
AppLovin needs a very clean quarter to rebuild confidence. Investors question how much market-share runway its gaming ad business has left and how sustainable its very high margins are, and last quarter's model-upgrade cadence issues raised new execution concerns. Gaming ads must remain the central growth engine, since e-commerce will not be big enough for a while. x.com x.com
AppLovin may be one of the most mispriced growth stocks, trading at about 15x expected 2027 earnings despite triple-digit EPS growth. In 2025 revenue rose 70% to $5.5B, EPS 116% and free cash flow 91% to $4.0B, with profits growing faster than revenue. Q2 2026 revenue rose 53% to $1.92B with an EBITDA margin of about 84% and $863M of free cash flow. x.com
AppLovin is a monster growth company trading at just 15 times forward earnings, while management expects it to grow much faster than the market expects. Per @stock_analysisx, its earnings per share went from $0.09 to $13 in four years, yet the stock is down 60% from its high. x.com
AppLovin's economics and margins may be almost too good to last, because unusually good economics act as a flashing red light inviting competition. Rivals could gradually raise acquisition costs, bid harder for supply or push AppLovin to share more with advertisers and publishers, shrinking 80% margins toward 60% without any rug pull. The moat's strength is unclear; if the economics hold for five years, buying now would work well, and its buybacks have been smart. x.com x.com x.com x.com x.com
AppLovin looks undervalued and possibly oversold after earnings, even though expectations were very high. At 18x adjusted EBITDA, even 20% growth for a few more years would make it very cheap if it converts 75% of EBITDA to free cash flow and returns it all through buybacks, and it will likely grow significantly faster than 20%. It fits a broader screen of stocks below 20x adjusted EBITDA with more than 30% growth. x.com
