AppLovin Corporation (APP) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: AppLovin Corporation

Updated on October 25, 2026 · accounts published on August 5, 2026

Reading of October 23, 2026: An exceptionally profitable, fast-growing business with record margins

AppLovin trades at a P/E of 20.0 over the last 12 months, 36 % below its sector median of 31.3, after the stock fell 56 % in a year.

• Is AppLovin expensive or cheap? Its P/E of 20.0 is 36 % below the sector median of 31.3, and EV/EBITDA is less than half its five-year average.
• How is the business doing? Operating margin reached 77 % over the last 12 months, against a 2018-2025 average of 31 %, while revenue grew 70 %.
• How strong is the balance sheet? Net debt was $3.73 per share in fiscal 2025, just 1.4 % of the share price and 0.2× EBITDA.
• What to expect from the next earnings? On November 4, 2026 analysts expect EPS of $4.04, after AppLovin beat estimates in 7 of its last 8 quarters.
• Is AppLovin growing with real cash or by diluting shareholders? Free cash flow was 72 % of revenue in fiscal 2025, while stock-based pay took only 3.8 % of sales.

Is AppLovin expensive or cheap?

Over the last 12 months AppLovin trades at a P/E of 20.0, 36 % below the 31.3 median of its 360 sector peers. Its EV/EBITDA of 15.8× compares with a five-year average of 36.1×. In technology, a multiple below 90 % of that average counts as cheap, and this one is far below it. The discount follows a 56 % fall in the share price over 12 months, which leaves the stock 65 % below its 52-week high of $733.60. Price to book is high at 27.7×, but on earnings the market now prices in much less optimism than a year ago.

How is the business doing?

Revenue rose 70 % year on year over the last 12 months and EPS grew 115 %, so profit is growing faster than sales. The operating margin of 77 % is more than double the 31 % average of fiscal 2018-2025, and fiscal 2025 had already set the high for that period at 76 %. ROIC of 64 % over the last 12 months is about 56 points above the 8 % median of 458 sector companies. Further back the record is less steady: ROIC topped 10 % in only 5 of the last 8 fiscal years, with a low of −3.6 % in 2020.

How strong is the balance sheet?

A debt/equity ratio of 1.11 over the last 12 months looks heavy until you net out cash. In fiscal 2025, debt of $11.07 per share minus cash of $7.34 leaves net debt of $3.73, only 1.4 % of the current price. Net debt equals 0.2× EBITDA, well inside the 1.5× a software company can tolerate. A current ratio of 4.30 points to ample short-term liquidity. Over the last 12 months the Altman Z of 30.2 sits deep in the safe zone and the Piotroski score is 8 out of 9, so financial quality looks solid on almost every front.

What to expect from the next earnings?

AppLovin reports on November 4, 2026, and the consensus expects quarterly EPS of $4.04, about 7 % above the last quarter. That report, on August 5, 2026, delivered $3.76, exactly in line with estimates. It was the only one of the last 8 quarters without a beat. Full-year expectations are steady: over the last 30 days the 2026 EPS consensus from 20 analysts moved only from $15.76 to $15.74, and revenue estimates barely changed. Of the 27 analysts covering the company, 21 rate it a buy, 5 a hold and 1 a sell.

Is AppLovin growing with real cash or by diluting shareholders?

In technology, P/E and book value miss what drives value: growth, pricing power and how much profit goes to staff as shares. Revenue per share grew 29 % a year over fiscal 2022-2025, nearly twice the 15 % healthy mark, and a per-share figure already accounts for dilution. A gross margin of 88 % in fiscal 2025 clears the 70 % bar for software, which points to pricing power. The Rule of 40 score is 101, far above the 40 that marks the elite. Stock-based pay of 3.8 % of revenue stays well under the 10 % healthy limit.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.