Bill 'Latency Lord' Brennan
Fundamental Growth Investor, B2B/Sector Leaders & Picks-and-Shovels
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 is a high reward-to-risk long as its e-commerce push gains traction while expectations sit at all-time lows. AXON Pixel installs rose 5.12% week over week to 13,105 from 12,467, per @UvyatM and @thetomcollins. The setup and valuation are attractive, and the bet is ultimately on management; for those who trust it, this should be a relatively easy long. x.com x.com
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 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 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 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 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 is priced for major deceleration: it trades at 24x earnings versus the S&P 500's 26x despite 57% EPS growth last quarter, showing the market doubts its growth is sustainable. Management targets long-term growth of 20-30%; if it comes reasonably close, the stock is very undervalued, and intrinsic value growth alone would produce substantial returns even if the multiple contracted further. 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 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 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.com
