Just a Dude Who Invests
Retail Investor, Economics & Technology Commentary
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
The market is badly wrong about AppLovin, which is down almost 60% over the past year while the business keeps growing. Revenue is up 52.8% year over year, the stock trades at 16x forward earnings, and the company is expanding beyond mobile gaming ads. 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'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'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 $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
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.comÂ
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.comÂ
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.comÂ