US Equities Analysis

APP — AppLovin

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 78.15%
Profit Margins 64.29%
Return on Equity 266.44%
Return on Assets 44.24%
Free Float 0.24B
Short Int % Utilisation 4.39%

2.2 Growth

Metric Value
Revenue Growth 59.0%
Free Cash Flow 3.18B
EBITDA 34.22 (Ratio)
Enterprise Value 166.7B
EV/Revenue 27.04
EV/EBITDA 34.22

Revenue growth of 59.0% places the company in a high-growth category.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* -4.32%
Risk / Std Dev (Ann.)* 74.81%
1-Year Price Return* -28.09%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $315.44
52-Week Range $303.17 – $745.61
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $5.48B
Prior annual revenue $3.22B
EBIT $4.16B
Tax rate 13.15%
NOPAT = EBIT × (1 − tax rate) $3.61B
Forecast start-growth basis 15.00%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $3.61B
Add: depreciation & amortisation $194.78M
Less: capital expenditure -$28.32M
Less/(add): working-capital cash-flow movement $77.92M
Current unlevered FCFF $3.86B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 15.00% $4.15B $223.99M -$32.57M $89.61M $4.44B $4.08B
2 11.88% $4.65B $250.59M -$89.97M $100.25M $4.91B $3.82B
3 8.75% $5.06B $272.52M -$156.07M $109.02M $5.28B $3.48B
4 5.62% $5.34B $287.85M -$226.35M $115.16M $5.52B $3.07B
5 2.50% $5.47B $295.05M -$295.05M $118.04M $5.59B $2.64B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 2.53
Cost of equity 18.62%
Pre-tax cost of debt 5.83%
WACC 18.18%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $36.55B
Implied terminal EV / EBITDA 5.54x
Terminal value as % of enterprise value 48.13%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $17.09B
Present value of terminal value $15.86B
Indicated enterprise value $32.95B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $32.95B
Less: gross interest-bearing debt $3.54B
Add: cash and equivalents $2.49B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $31.89B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 341,970,000.00
Share-count basis reported diluted weighted-average shares
Current market price $311.68
DCF indicative value per share $93.26
Indicative value vs. market price -70.08%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration review required
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:23:04.772380 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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