AppLovin: Now It's Time To Jump In (Rating Upgrade)

Summary

  • I'm upgrading AppLovin stock to "Buy" today thanks to reasonable valuation and strong expansion prospects despite its heavy dip.
  • Q4 results showed significant growth: $1.37B sales (+44% YoY), $848M adjusted EBITDA (+78% YoY), and $2.1B FCF.
  • Strategic pivot to the advertising platform and potential gaming unit sale to Tripledot Studios could drive higher margins and growth.
  • I believe the firm is going to outgrow today's consensus by the end of this calendar year because of a few reasons.
  • Despite market correction risks, APP's current PEG of 0.88x and high EPS growth expectations make it a compelling buy-the-dip opportunity.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »

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My Thesis Update

I first called AppLovin Corporation (NASDAQ:APP) stock a "Hold" in late November 2024 because the market optimism at the time was leaving no room for errors for the management - it

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This article was written by

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Oakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information.

He leads the investing group Beyond the Wall Investing with features that include: a fundamentals-based portfolio, weekly analysis on insights from institutional investors, regular alerts for short-term trade ideas based on technical signals, ticker feedback by request from readers, and community chat. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in APP over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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