APP

Valued at $90.1 billion by market cap, AppLovin Corporation (APP) is a leading mobile advertising and marketing technology company that helps businesses acquire users, monetize apps, and optimize digital advertising performance. The California-based company provides tools for ad targeting, analytics, and revenue optimization, enabling developers and brands to grow and monetize their digital products efficiently. The advertising giant is expected to announce its fiscal third-quarter earnings for 2026 after the market closes on Wednesday, Nov. 4. Ahead of the event, analysts expect APP to report a profit of $3.94 per share on a diluted basis, up 60.8% from $2.45 per share in the year-ago quarter. The company has consistently surpassed Wall Street's EPS estimates in its last four quarterly reports. - No 'Example Anywhere on the Planet': Billionaire Kevin O'Leary's Utah Data Center Could Use Enough Electricity to Power 16 Million People - Dear GE Aerospace Stock Fans, Mark Your Calendars for October 20 - Dear Nvidia Stock Fans, Mark Your Calendars for October 20 - Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. For the current year, analysts expect APP to report EPS of $15.67, up 56.1% from $10.04 in fiscal 2025. Its EPS is expected to rise 27% year over year to $19.90 in fiscal 2027. APP shares have fallen 53% over the past year, significantly underperforming the S&P 500 Index's ($SPX) 15.4% gains and the State Street Communication Services Select Sector SPDR ETF's (XLC) 5.5% downtick over the same time frame. AppLovin has lagged the broader market over the past year as concerns about its AI advertising technology, slower-than-expected product development, and mounting legal scrutiny have undermined investor confidence. Yet, analysts' consensus opinion on APP stock is bullish, with a "Strong Buy" rating overall. Out of 30 analysts covering the stock, 21 advise a "Strong Buy" rating, two suggest a "Moderate Buy," and seven give a "Hold." APP's average analyst price target is $483.10, indicating a potential upside of 79.5% from the current price levels. On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

- AppLovin recently opened its Ads Manager platform to public self-serve access, while guiding for high adjusted EBITDA margins and acknowledging a slower revenue trajectory and an execution miss against earlier expectations. - The AI powered ad engine that drives almost all of AppLovin's sales is now both the growth lever and the primary operational risk, as management works to improve models without letting compute and legal costs erode profitability. - The focus now turns to how this earnings reset, particularly the downward estimate revisions, reshapes AppLovin's investment narrative and risk balance. Scan beyond AppLovin and size up other AI driven advertisers by reviewing our hand picked 39 profitable AI stocks that aren't just burning cash that already convert complex tech into real profitability. To own AppLovin, you need to believe its AI ad engine can keep delivering strong results for advertisers while the firm broadens beyond gaming into consumer and mid market clients. The recent reset in growth expectations and margin guidance puts the spotlight on execution quality rather than long term ambition. In the near term, the main upside catalyst remains clear model improvements that support ad spend without inflating compute costs. The biggest near term risk is that slowing revenue momentum, legal overhangs around AI disclosures and data access, and heavier privacy demands combine to pressure profitability. Q3 results in early November are an important check on whether the recent Ads Manager upgrade and model refresh are translating into healthier advertiser budgets and stable cash generation. The opening of AppLovin's Ads Manager to public self serve access is the most relevant development for this reset. You now have a business that is trying to turn a historically high touch, gaming led engine into a broader, more automated platform that mid market and consumer advertisers can use directly. That decision makes the growth story less about a few large accounts and more about onboarding, retention and model accuracy at scale. This expansion path also sharpens both the upside and the risk around AXON model upgrades. Better tooling and easier onboarding can support catalysts such as diversification into consumer, lead generation and connected TV through Wurl. At the same time, any misstep that increases compute, compliance or legal expense faster than new budgets arrive, especially with the stock already down more than 50% over the past year, would weigh heavily on how investors view execution quality. Analysts sketch a fairly specific picture of where AppLovin could land by the end of this decade. The current consensus points to earnings today of about US$4.4b and forecast consensus earnings of US$8.5b by 2029, which implies roughly a doubling of profit. The same group is baking in forecast revenue growth of 24.4% per year over the next three years and a forecast revenue level of about US$13.1b by that 2029 estimate year. In simple terms, the earnings change required is an increase of roughly US$4.1b, taking AppLovin from US$4.4b to US$8.5b on the timeline analysts are using. Uncover how AppLovin's fair value signals a potential 80% upside to its current price that could narrow quickly if sentiment around AppLovin turns. One alternate view fixates on margins rather than growth. The lowest AppLovin analysts already assumed profit margins drift to 62.0% and 2029 earnings land nearer US$8.1b on about US$13.0b of sales. That is a tougher story than consensus. With this new Ads Manager reset, you should expect those estimates and opinions to evolve further. Explore 12 other AppLovin fair value estimates, including one that suggests it could be worth just $331.94! Don't just follow the ticker. Dig into the data and build a conviction that's truly your own. - A great starting point for your AppLovin research is our analysis highlighting 4 key rewards that could impact your investment decision. - See our latest analysis for AppLovin. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate AppLovin's overall financial health at a glance. Once you have a view on AppLovin, it can help to widen the lens and benchmark it against other opportunities that match your risk level and return goals. The Simply Wall St Screener lets you scan the market quickly using fundamentals rather than hype so you can build a short list that actually fits your playbook. - If you want dependable balance sheets and solid fundamentals at the center of your portfolio, start with this curated list of solid balance sheet and fundamentals (25 results) that keeps financial resilience front and center. - If your priority is limiting downside risk while still staying invested in equities, filter for companies in the 32 resilient stocks with low risk scores that score well across stability and quality checks. - If you are hunting for under followed opportunities with stronger business quality than their profiles suggest, comb through the 20 high quality undiscovered gems and build your own bench of potential future leaders. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include APP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

AppLovin (APP) just posted a 53% jump in second quarter 2026 revenue and even faster profit growth, yet the share price has retreated sharply, forcing investors to weigh fundamentals against market skepticism. Despite the strong second quarter update, AppLovin's share price has been sliding, with a 30 day share price return of down 16% and a year to date share price return of down 56%, even though the three year total shareholder return is very large and remains far ahead of shorter term performance. Recent pressure follows trimmed brokerage views, a class action over alleged AI disclosures, and investor focus on whether upcoming third quarter results justify the current US$272.28 level. Seize this pullback in AppLovin to reassess your tech exposure and compare it with a hand picked group of 39 profitable AI stocks that aren't just burning cash AppLovin now trades well below the average analyst target and its own intrinsic value estimate, yet both still sit far above the current US$272.28 price. Where does fair value actually land in that gap? According to one of the most closely followed AppLovin narratives, the fair value sits at $507, which is well above the latest $272.28 close and frames the pullback as a valuation gap rather than a minor wobble. AppLovin is one of the best operators in the market it already dominates. It just had its largest legal overhang removed, its most recent stumble was a release-schedule problem rather than a demand problem, and it is entering a market several times larger than the one it currently leads. The stock is at 25.3 times trailing earnings. See why 31 investors see AppLovin as 46% undervalued. Result: Fair Value of $507 (UNDERVALUED) Still, AppLovin's narrative could unravel if the Q2 timing explanation proves incomplete or if fresh regulatory scrutiny again challenges how its data engine operates. Find out about the key risks to this AppLovin narrative. Sentiment around AppLovin is split, so take this as a signal to move quickly. Test the numbers yourself and see what the optimism is built on with 4 key rewards. AppLovin might be front of mind right now, but you do not want your portfolio hinged on a single story when other opportunities are lining up. - Target cash rich compounding potential by scanning a 8 dividend fortresses that can help you focus on income opportunities with higher yields in one place. - Hunt for quality at a discount by using the 20 high quality undiscovered gems that highlight stocks with solid fundamentals that are not widely followed yet. - Prioritize resilience first by zeroing in on 32 resilient stocks with low risk scores designed to surface companies with steadier profiles when conditions get choppy. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include APP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in ServiceTitan Inc.? Here are five stocks we like better. ServiceTitan’s fiscal Q2 revenue rose 21% year over year to $292.8 million, while free cash flow increased 47% to a record $50.5 million and operating margin expanded to 15.2%. Adoption of the AI-powered Max platform more than doubled during the quarter, and the company now expects more than 700 Max locations by fiscal year-end. ServiceTitan is prioritizing Max and its Software Factory by slowing expansion into additional trades. GTV growth moderated to 17% amid softer customer job and lead growth, though management maintained its fiscal 2027 outlook. Max’s billing ramp and free onboarding are expected to create a combined $4 million to $5 million revenue headwind for the rest of the year. Why AppLovin’s CEO Is Selling While Quantum Insiders Are Buying ServiceTitan (NASDAQ:TTAN) reported fiscal second-quarter 2027 revenue growth of 21% and record free cash flow, while outlining a broader investment push behind its AI-driven Max platform and internal “Software Factory” initiatives. Total revenue for the quarter was $292.8 million, up 21% year over year. Subscription revenue rose 22% to $212.4 million, while usage revenue increased 24% to $72.1 million. The company said total platform revenue, which combines subscription and usage revenue, grew 22% to $284.5 million. → 3 Under-the-Radar Defense Stocks With Record Backlogs 3 Hot New IPOs Defying the 2025 Market Slump Chief Executive Officer Ara Mahdessian said the company is concentrating more resources on Max, which ServiceTitan describes as an agentic operating system for trade businesses. The platform combines more than 30 AI-enabled capabilities intended to automate demand generation, appointment booking, field sales, payroll, inventory and other workflows. President Vahe Kuzoyan said ServiceTitan more than doubled its number of Max locations during the fiscal second quarter, surpassing its prior target. The company had slightly more than 100 enrolled locations after fiscal first-quarter growth and now expects to finish fiscal 2027 with more than 700 Max locations. → Morgan Stanley Eyes Good Things Ahead for Meta After $18 Billion Legal Settlement ServiceTitan Made Waves in Its IPO, But Is the Stock a Buy? ServiceTitan has begun selling Max to select new customers in addition to existing customers. Kuzoyan said early signals suggest some prospective customers are willing to adopt Max at the start of their relationship with ServiceTitan rather than first implementing the company’s traditional core platform. Management also plans to introduce smaller Max packages for customers that are not ready for a full business transformation. Mahdessian said those offerings could allow customers to adopt AI capabilities focused on demand generation or field operations before expanding their use of the broader platform. → Tesla’s Robotaxi Launch Wasn’t the Moment Investors Expected The company cited Delponte Plumbing & Heating as an example of Max adoption. According to Mahdessian, Delponte’s revenue rose more than 35% year over year in the first quarter of 2026 and more than 45% in the second quarter of 2026. The contractor also launched a recurring-service business that served 400 customers in three months without adding back-office staff, ServiceTitan said. ServiceTitan expects Max implementations to become more efficient over time. Kuzoyan said the company is not planning meaningful staffing increases for implementation teams, instead expecting AI and process improvements to reduce the time and effort required to onboard customers while maintaining implementation quality. To support increased spending on Max and the Software Factory, ServiceTitan is narrowing its near-term expansion plans. The company will focus on its existing commercial trades, including mechanical, electrical, plumbing and landscaping, as well as residential roofing, rather than pursuing planned expansion into new commercial trades or broader residential exterior categories. Management said the shift does not reduce investment in commercial, construction or roofing operations already underway. Kuzoyan said construction remains integral to ServiceTitan’s commercial strategy, while the change applies to incremental investments that otherwise would have targeted new trades. Mahdessian described the Software Factory as an effort to use AI to speed product development and improve how ServiceTitan builds, sells and markets software. He said some large features previously estimated to require quarters of development are now being delivered in months, with fewer escaped defects and more automated identification and resolution of bugs. Virtual Agents, another component of the company’s AI monetization strategy, also showed growth during the quarter. Revenue and call volume for Virtual Agents each more than doubled sequentially, according to Kuzoyan. The offering includes voice and SMS capabilities for functions such as after-hours calls, overflow calls, lead response and customer messaging. CFO Dave Sherry said Virtual Agent adoption was balanced between customers using the product for the first time and customers replacing existing solutions. Gross transaction volume was $26.8 billion, an increase of 17% from a year earlier. Sherry said growth was about 200 basis points below recent quarters after adjusting for business days and weather, primarily because existing customers experienced lower job growth. Lead volume growth was more moderate than seasonal patterns during May and June before stabilizing in July, the company said. The trend was broad-based across trades and markets, though it was particularly notable among HVAC-focused customers. ServiceTitan said it does not have clarity on the causes of the lead-volume trend and has incorporated the more moderate second-quarter GTV growth into its outlook for the remainder of the fiscal year. Platform gross margin was 81.1%, up 40 basis points year over year. Total gross margin was 74.6%, up 20 basis points. Operating income was $44.4 million, producing a 15.2% operating margin, up 310 basis points. Free cash flow was $50.5 million, up 47% year over year. Net dollar retention exceeded 110%. Sherry said the company now views 25% incremental margins as a floor rather than a target and expects fiscal 2027 incremental margins of 33%. For the fiscal third quarter, ServiceTitan forecast revenue of $285 million to $287 million and operating income of $29 million to $30 million. For fiscal 2027, it projected revenue of $1.139 billion to $1.144 billion and operating income of $152 million to $154 million. The company said its growing mix of Max sales will create a near-term revenue-recognition effect. Core subscription revenue is recognized ratably over contract terms, while upsell products such as Max are recognized as billed. Because Max customers typically receive an initial period without billing and ramp over the first year, ServiceTitan expects a $2 million to $3 million subscription-revenue headwind over the rest of fiscal 2027. ServiceTitan also expects approximately $2 million less professional-services revenue during the remainder of the year because it is not charging existing customers onboarding fees to transition to Max. Sherry said the combined near-term impact from Max mix shift across subscription and professional services is approximately $4 million to $5 million. Separately, the company announced that Chief Revenue Officer Ross Biestman will leave his operating role after the company’s Pantheon event in the fiscal third quarter and serve as an adviser through the end of the fiscal year. Rikus Pretorius, currently senior vice president of worldwide sales, will become CRO in the fourth quarter. ServiceTitan, Inc (NASDAQ: TTAN) is a cloud-based software provider specializing in end-to-end business management solutions for residential and commercial trade contractors. The company's platform integrates customer relationship management, scheduling and dispatch, mobile workforce management, invoicing, payments and reporting tools into a single suite. By automating key back-office processes, ServiceTitan helps field service businesses improve operational efficiency, enhance customer experience and drive revenue growth. At the core of ServiceTitan's offering is a mobile application that allows technicians to access job details, update work orders, capture signatures and process payments from the field. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "ServiceTitan Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

AppLovin (NASDAQ:APP) primarily generates revenue by offering a specialized digital software suite featuring products like AppDiscovery, which effectively helps mobile application developers market their digital assets globally. While dealing with multiple law firm inquiries regarding its recent business disclosures, it expanded its advertising tools to all e-commerce merchants and reported an operating margin of 78% for the quarter ended June 30, 2026. Reddit (NYSE:RDDT) primarily generates revenue by managing an internet platform where everyday individuals form highly specific digital communities to discuss shared passions, exchange links, and consume multimedia content. It recently rolled out new automated campaign management tools for advertisers and gained formal inclusion in the S&P 500 index, while reporting an operating margin of 29% for the quarter ended June 30, 2026. Revenue helps everyday investors understand exactly how much gross capital a company successfully captures from its core commercial operations before necessary business expenses are calculated. This metric reveals whether an organization is successfully attracting customers and growing its overall business volume over time. Data source: Company filings. Data as of Sept. 4, 2026. Examining the revenue trends for AppLovin and Reddit reveal interesting insights about their businesses. Both depend on digital advertising income to fund their organizations. The ad industry is seasonal, with advertiser spending typically shooting up in the fourth quarter to capture consumers during the key holiday shopping period. Reddit's sales show this industry trend as its annual income peaks in Q4. Every year, the sales drop in Q1, but display a consistent upward trajectory. This demonstrates the company's ability to capture ad dollars. Key to that success is growth in platform users. In Q2 of 2026, Reddit's daily active users increased 18% year over year to 130.3 million. This helped it achieve $804.9 million in Q2 sales, which represents the eighth consecutive quarter of more than 60% year-over-year revenue growth. While Reddit's performance is impressive, AppLovin is perhaps even more so. Until recently, it displayed the typical ad industry Q4 sales spike seen with Reddit. That changed in 2025. Suddenly, AppLovin's revenue trend showed quarter-over-quarter growth, with Q1 of 2026 exceeding 2025's Q4, which is unusual. This illustrates the company's strength in the mobile advertising arena. However, AppLovin's stock is down this year, dropping to a 52-week low of $297.50 in August because its sales growth decelerated. Wall Street analysts downgraded the stock as its Q2 revenue of $1.9 billion missed expectations. Before you buy stock in AppLovin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AppLovin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,413,876!* Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 6, 2026. Robert Izquierdo has positions in Reddit. The Motley Fool has positions in and recommends Reddit. The Motley Fool has a disclosure policy. AppLovin vs. Reddit: What Quarterly Revenue Growth Patterns Tell Investors About These Media Companies was originally published by The Motley Fool

A month has gone by since the last earnings report for AppLovin (APP). Shares have lost about 6.6% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is AppLovin due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts. AppLovin reported adjusted earnings of $3.76 per share, surpassing the Zacks Consensus Estimate of $3.72 by 1.08%. Earnings increased 66.4% from $2.26 per share in the year-ago quarter. The company has now exceeded consensus EPS estimates in each of the past four quarters. However, the magnitude of the latest beat narrowed from the preceding quarter, when earnings of $3.56 per share topped expectations by 4.71%. On a sequential basis, second-quarter EPS increased 5.6%. Revenues reached $1.92 billion, up approximately 52.4% from $1.26 billion a year earlier. The top line nevertheless missed the Zacks Consensus Estimate by 0.75%. Revenues increased about 4% sequentially, implying first-quarter revenues of roughly $1.85 billion. The combination of rapid year-over-year expansion and a sequential slowdown in incremental growth helps explain the mixed interpretation of the quarter. AppLovin continues to expand at an exceptional rate for its scale, but elevated expectations leave relatively little room for execution delays. Adjusted EBITDA climbed 58% year over year to $1.61 billion, implying approximately $1.02 billion in the prior-year quarter. EBITDA growth therefore exceeded revenue growth by roughly six percentage points. More importantly, adjusted EBITDA represented approximately 83.9% of second-quarter revenues. That is an exceptionally high profitability level and demonstrates the operating leverage embedded in AppLovin's technology-driven advertising platform. The quarter also generated $863 million of free cash flow, equivalent to roughly 44.9% of revenues and about 53.6% of adjusted EBITDA. Cash generation was softer than the company's recent earnings profile might suggest, but the weakness primarily reflected timing rather than a deterioration in underlying economics. Costs increased sequentially as AppLovin directed additional resources toward computing capacity for existing and new artificial-intelligence models. This is worth watching because model training and inference requirements could create some quarter-to-quarter margin variability even if the investments ultimately support higher revenues. AppLovin ended the quarter with $3.05 billion in cash and $3.7 billion of total debt. The resulting $650 million gap between debt and cash is modest relative to the company's EBITDA generation, with net leverage standing at approximately 0.1 times trailing adjusted EBITDA. During the quarter, the company repurchased or withheld approximately 1.14 million shares for $551 million. Repurchase activity moderated compared with the first quarter as management balanced capital returns against temporarily softer free cash flow. The combination of strong profitability, substantial cash holdings and minimal net leverage gives AppLovin flexibility to fund AI infrastructure, pursue product expansion and continue returning capital without placing meaningful stress on the balance sheet. Third-quarter guidance provides one of the strongest counterarguments to the post-earnings pessimism. AppLovin expects revenues between $2.055 billion and $2.085 billion. The $2.07 billion midpoint implies approximately 7.8% sequential growth from the second quarter’s $1.92 billion, representing a meaningful acceleration from the second quarter's roughly 4% sequential increase. Adjusted EBITDA is projected between $1.71 billion and $1.74 billion. At the $1.725 billion midpoint, EBITDA would increase approximately 7.1% sequentially from $1.61 billion. The company expects an adjusted EBITDA margin of approximately 83% in the third quarter. That would be modestly below the second quarter's roughly 83.9%, reflecting, in part, higher AI-related infrastructure spending. Still, sustaining a margin above 80% while investing aggressively in model development would underline the strength of APP's operating model. Importantly, the outlook incorporates model enhancements already deployed and does not depend on additional releases that have yet to reach production. That makes the guidance somewhat more tangible than an outlook dependent on future technological breakthroughs. Since the earnings release, investors have witnessed a downward trend in estimates revision. At this time, AppLovin has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AppLovin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. AppLovin belongs to the Zacks Technology Services industry. Another stock from the same industry, SLB (SLB), has gained 11.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. SLB reported revenues of $8.97 billion in the last reported quarter, representing a year-over-year change of +5%. EPS of $0.55 for the same period compares with $0.74 a year ago. For the current quarter, SLB is expected to post earnings of $0.62 per share, indicating a change of -10.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for SLB. Also, the stock has a VGM Score of C. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AppLovin Corporation (APP) : Free Stock Analysis Report SLB Limited (SLB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

AppLovin's ad engine handles more spend than Pinterest, Snapchat, and Reddit combined, posting $1.92 billion in Q2 2026 revenue at 84% EBITDA margins. Grieve passed, warning a rival could write a better algorithm and erase AppLovin's moat overnight, with 55% of top mobile games already on the platform. Grieve's valuation model reaches a $480 price target implying just a 9% CAGR, making the risk-reward unattractive despite aggressive buybacks and strong guidance. Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now. The report is free. Enter your email and see if any of your stocks made the cut. Shares of AppLovin (NASDAQ:APP) closed at $319.05 on September 2, marking a 52.7% year-to-date decline for a stock that spent late 2025 above $656. On the September 3, 2026, episode of The Investor's Podcast Network's We Study Billionaires, hosts Kyle Grieve and Shawn O'Malley devoted a full teardown to the mobile ad platform. Grieve framed the show as "TIP843: AppLovin (APP): The 30-Bagger Down More Than Half." After walking through the model, both hosts passed. The scale is the first thing that lands. Grieve noted that "the advertising spend on AppLovin is more than Pinterest, Snapchat's and Reddit's combined revenue." That comparison puts the AXON 2 engine in context for readers outside ad tech. AppLovin runs a marketplace where mobile game publishers and, increasingly, e-commerce brands bid for user attention through the company's recommendation algorithm. Asset-light in this context means the platform monetizes traffic without owning the audience: no content studio, no consumer app, minimal capex. O'Malley pointed to "over 79% over the last 12 months" adjusted EBITDA margins and $7.6 million in revenue per employee as evidence of that model. Q2 2026 revenue reached $1.92 billion, up 52.82% year over year, with an 84% adjusted EBITDA margin, per AppLovin's Q2 2026 8-K exhibit filed with the SEC. Free Report, Just Released Did Any of Your Stocks Make the Top 10 List? It is an uncomfortable question, and there is now an answer to it. 24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now. Open your account and look at what you own. Some of it you bought for a reason you could still defend today. Some of it you bought years ago for a reason you can no longer remember. The report is free. Put the ten next to what you own and find out which is which. Enter Your Email and See the Ten → Free from 24/7 Wall St. It lands in your inbox. Grieve recounted CEO Adam Foroughi's 2015 decision to turn down an acquisition offer: "He walked away hoping for a valuation closer to a billion dollars. To give you an idea of how big a mistake that would have been, the company is now valued at a little over a hundred billion dollars today." AppLovin's market cap stands near $107.2 billion as of September 3, 2026. The anecdote set up the hosts' capital-allocation debate. Grieve graded the buyback program highly. AppLovin repurchased 1.1 million Class A shares for $551.3 million in Q2 2026 and 6.4 million shares for $2.58 billion across full-year 2025. O'Malley took a more skeptical view of overall capital allocation, citing prior M&A history that included studio acquisitions later divested. The company recorded a $188.9 million goodwill impairment and a $99.4 million loss from discontinued operations in FY 2025. Grieve graded buybacks well; O'Malley graded the full record as average. Both positions stayed on the table. Grieve's core concern was the durability of an algorithmic moat: "There's just something I don't really like about a business whose core advantage is a really good algorithm, because it feels like another business can just write a better algorithm and then poof, there goes your business model." He layered on saturation risk, noting roughly 55% of top mobile games are already on Max. O'Malley framed the same worry through platform economics. With Google and Meta, "it's sort of transcended just the algorithm" because network effects anchor the business regardless of which quarter's ranking model wins. AppLovin looks more like a pure technology bet in his framing. The hosts invoked a circle-of-competence argument, the Warren Buffett idea that investors should only underwrite businesses they can accurately model. Both said ad-tech algorithms sit outside theirs, echoing their earlier caution on Trade Desk (NASDAQ:TTD). Grieve's base case used a 17% revenue CAGR, 77% EBITDA margins, and a 13x EV/EBITDA multiple to reach a $480 price target implying a 9% CAGR. His verdict: "My thoughts on this business are that it's a pass. While it certainly offers upside, I just don't think I could find myself getting comfortable enough with the business to ever have it in the intrinsic value portfolio or my personal account." Foroughi is running the buyback aggressively, and Q3 2026 guidance calls for revenue of $2.055 billion to $2.085 billion at roughly 83% adjusted EBITDA margin. The CEO's conviction is expressed in capital returns. Grieve and O'Malley's restraint is a reminder that two disciplined investors can pass on one of the best businesses either of them has ever modeled without predicting a break. Readers weighing AppLovin after the drawdown should decide whether an algorithm is the kind of moat they are willing to hold through a competitive shock. If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research point to as the 10 best stocks to buy right now, and it's free. Read more here and >;elm:context_link;itc:0;sec:content-canvas" data-yga="{"yLinkElement":"context_link","yModuleName":"content-canvas","yLinkText":"see which stocks made the cut -->"}" class="link ">see which stocks made the cut -->> Contact [email protected] for any questions or corrections.

AppLovin (NASDAQ:APP) provides specialized software solutions that help mobile application developers to market their digital products, optimize advertising inventory through real-time competitive auctions, and securely analyze user data. While facing legal inquiries from a shareholder rights firm and simultaneously releasing a mobile shopping insights report, it generated an operating margin of 78% for the quarter ended June 30, 2026. Meta Platforms (NASDAQ:META) primarily generates its revenue by offering a global suite of digital communication applications and social networks where everyday users share visual media, direct messages, and interactive content. It agreed to a regulatory settlement regarding user safety design changes and announced a strategic data center venture, while reporting an operating margin of 31% for the quarter ended June 30, 2026. Revenue remains essential for investors to continually evaluate because it reveals the total amount of money a business collects from its commercial activities before any operating expenses, corporate taxes, or other financial obligations are deducted. This metric helps investors measure a company's overall size, market footprint, and long-term trajectory. Data source: Company filings. Data as of Aug. 26, 2026. AppLovin and Meta Platforms are almost entirely dependent on digital advertising for income. Examining revenue trends between them reveal interesting insights about how effectively they are capturing this ad spend. The advertising industry experiences seasonal ebbs and flows. Typically, the fourth quarter represents the largest in terms of revenue for digital media companies because of the holiday shopping season. Yet in AppLovin's case, it has defied this trend in recent quarters. The company's Q1 revenue in 2026 was higher than Q4. Meanwhile, Meta displayed the usual pattern of Q1 sales dropping after the Q4 spike. Not only did AppLovin's revenue accelerate in Q1, it continued to grow in Q2, delivering a streak of five consecutive quarters of sales growth. The company expects to maintain this trend in Q3 with a forecast for revenue to come in around $2.1 billion. As the leader in social media, Meta captures the lion's share of ad spending in that market. It's the reason why the company continues to see year-over-year sales growth. It recently settled a social media addiction lawsuit and implemented controls to protect youth using its platforms. Meta's big bet on the artificial intelligence boom led to massive capital expenditures, but the company stated AI is accelerating its business growth and opening doors to new revenue opportunities. Before you buy stock in AppLovin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AppLovin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $439,308!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,286,826!* Now, it’s worth noting Stock Advisor’s total average return is 964% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 27, 2026. Robert Izquierdo has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy. AppLovin vs. Meta Platforms: Analyzing Quarterly Revenue Trajectories Between These High-Growth Digital Media Companies was originally published by The Motley Fool

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Travis Hoium, and Jon Quast discuss: MercadoLibre's rapid revenue growth and contracting margins. Has Unity Software finally turned the corner? The changing strategy for Celsius Holdings. Applovin's revenue continues to decelerate. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » A full transcript is below. Before you buy stock in MercadoLibre, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MercadoLibre wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,189!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,330,956!* Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 21, 2026. This podcast was recorded on Aug. 6, 2026. Tyler Crowe: Big earnings moves today on Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe. Today, I'm joined by longtime Fool contributors, Travis Hoium and Jon Quast. Travis is doing the full gamut this week with hosting and analyst duties. Travis Hoium: A lot of Travis time. Tyler Crowe: Burning the candle on both ends this week. I think today might be the busiest day when it comes to earnings out there. I think it's something like 530 companies. Obviously, we can't get to all of them. What we did before the show was look at No. 1, companies that are moving or their stocks are moving big time after earnings releases, and also, we want to pick companies that are either Motley Fool favorites of our members, or some of our analysts, and some of our personal favorites as well. We're going to start today with MercadoLibre. Shares are down about 7% after the company reported earnings. Across the board, they beat expectations, but one of the things that was noticeable was that earnings have declined for a couple of quarters. Jon Quast: Well, let's start with the top line there, Tyler. This is its fastest growth in the last four years. That's really saying something because this is a company that has averaged 50% quarterly growth over the last 10 years. Growth is so important when it comes to the stocks that we're investing in. It's not the only factor, but it is a very crucial factor when it comes to market-beating investments. Mercado Libre, as you look at what it has done over the long-term, this has to be near the top of investors' minds when it comes to creating a list of long-term compounders. Travis Hoium: That growth rate was 50% for this quarter, just to be clear. I think this is just the place that the market is in today. This was a phenomenal quarter from a growth perspective, but the downside is margins are down, and this is an explicit trade-off that management is making, saying, you know what? We're going to give people more perks. We're going to give sellers more perks to try to drive more revenue to the business. In theory, you're playing something like an Amazon game where once people get used to both shopping on your platform and also building a business on your platform from a seller side, that should be a phenomenal place to be. But they're giving up that profitability short-term. That's what investors are saying, there's a yin and a yang here going, revenue growth is great, but I'm not seeing the profitability. How much do I really want to pay for this stock? I think that's the reaction today, and it's not just MercadoLibre. This is happening across the market. You look at a company like Duolingo, also down big today, same trade-off that they're making, we're going for user growth. We're not going for profitability today, and shares are selling off. This is the challenge when you get to a relatively highly valued market is when you're starting to make those tradeoffs, you never know which one the market wants to see. Jon Quast: Well, Travis, if I could jump in there on that trade-off, you look at the lower threshold for free shipping that it chose to do in Brazil a while back. That is actually working when it comes to the Amazon game that you referenced. User growth is up over 20% when you look at that. Then also, I think really key, the ratio of daily users to monthly users is at its highest level ever. This is becoming more of a daily habit for MercadoLibre users in its key markets, and then also items per buyer in Brazil are up 19%. I think that is a really crucial data point because this is basically saying that MercadoLibre is becoming more of a go-to platform on a daily basis for more things. I think that's a habit-forming trend, and I think that it's directly a result of that free shipping decision. Travis Hoium: This is where you want to know what investor you are. If you are a Foolish investor with a capital F, you're looking at this, going, we want this company to be bigger long-term. This is a great discount if I have been looking at this stock, because you know what? That profitability, that's not the short-term answer that I want as an investor. I want that long-term growth. But if you're trying to guess what's going to happen quarter to quarter, you maybe got this wrong. That's where I think, stepping back and going, what do I really want from this company, and knowing that going into earnings is really important. Tyler Crowe: We brought up the Amazon conversation because comparisons are pretty easy. You look at this. It's a digital fintech, e-commerce platform as well. But one of the things I do think about because we're talking about profitability margins and things like that, and the comparison is always Amazon, I think it's fair to say that Amazon had a very long leash with the market in its growth phase, willing to overlook profitability for a very long time because it was like, it's growing. It's doing all these new things. It seems to be worth it. It was generating enough cash that could make those investments in other things. Then it found AWS, and that's when profitability really took off here. With MercadoLibre, we're at a point where it's making similar moves, where it's like, we're going to forgo profitability now, credit card perks, lowering the threshold for order value for free shipping, and things like that. It is running the playbook. One thing I'm curious, though, is, to have that much growth and then still see earnings declining, that's a pretty aggressive choice in that cost versus revenue growth paradigm. I do wonder is revenue growth almost too prioritize here? 50% growth is amazing. It's incredibly hard to sustain, and you're doing it in a declining earnings environment. I can't help but think that management is too focused on revenue growth here and maybe not growth with economic scale. Jon Quast: Well, Tyler, I push back on the wording here that you chose with foregoing profitability because I'd be inclined to agree with you here, but MercadoLibre is not in the red. In fact, it invested 2 billion in its credit portfolio. This is one area the business that the market is a little bit concerned about the riskiness of the portfolio, investing $2 billion into that credit portfolio and still free cash flow positive. I think that's a huge thing. It had nearly a 7% margin for income from operations. These are the free cash flow and the income from operations. These are two really important profitability metrics and still solidly in the black. Think about this. This is 50% growth, and this isn't tech, for the most part, this is actually people buying things on the platform. It is tech, but not in the same way that we're accustomed to with the strong growth rates in the market right now. This is a retail play, and that is so interesting to think about in the reverse. You pull back on some of this growth investment right now. What's the alternative? Better profitability to what end? Are we going to pay a dividend? Are we going to buy back stock? I'm not really sure where the money is used for the benefit of shareholders if we pull back on the growth. I think that it needs to keep the pedal to the metal. Tyler Crowe: Always a fascinating conversation, I'm sure that we're going to be having this next quarter when MercadoLibre reports earnings because this is always that push and pull that always happens. Coming up after the break, we're going to hit a stock that is doing much better, at least in the market reaction today, and it's Unity Software. ADVERTISEMENT: You just found out that your sales team is at risk of missing quota. Don't panic. Just ask Rippling AI. Since it's built on your real-time people and business data, Rippling AI can pull metrics from Rippling and Salesforce into a meeting-ready dashboard showing quota attainment, headcount plan, and monthly revenue to quota by region. In seconds, you'll see exactly what's behind your quota risk and fix it before it's missed. Question answered, action taken, crisis averted. When you have critical business questions that need answers, don't just file a ticket and wait weeks for an outdated report. Describe what you need and have Rippling AI build it instantly from your live people and business data, whether it's a dashboard with detailed charts or automated workflows with the right triggers, conditions, and approvals. 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If you're a long-term shareholder, this still has not worked out particularly well. It almost seems to me like they're just figuring out this business and, in particular, figuring out how to monetize the software that they've been making and the ad platform that they've been trying to build. Just as a point, where the mobile business in general is getting old and dodgy, it reminds me a little bit of the console business a decade ago. Consoles have just been in a steady decline over that period of time. I don't know. Are we still going to be excited about apps on an iPhone app store in 10 years from now, and that's really where Unity really dominates things. It's just so interesting to see that they have started to increase their revenue. The market is starting to react a little bit positively because they've gotten their stuff together. But it still trades for almost 10 times sales, and I just can't get my head around why I should be excited about this company long term. Jon Quast: Tyler, you pointed out four straight quarters of accelerating revenue growth. I just have to ask, is that good? Because MercadoLibre has four straight quarters of revenue growth, too. Really [inaudible] here today. Sorry, I just had to get that point in. But it is interesting to Travis' point, this is actually growing now with ads. There are two parts of the business, we have the create side of things, and I feel like what Unity is more known for. That game creation, that video creation software, and that's really plateaued here, only 5% growth in this quarter, all of this revenue growth coming from the Ads network, 63% growth in the revenue segment, and expecting an accelerating growth rate yet again in the upcoming quarter of roughly 70% growth. This is very interesting, a business shift is taking place. If you recall a few years ago when Unity really had problems, it was because the ads were suffering, and now it does seem like it's getting its act together there in that segment, but the create segment, is not really showing anything. Tyler Crowe: Management did put out a plan last quarter. They're going to shed some of those mobile publishing divisions, things like that. Some of its ad networks. They're like, This isn't working for us, there have been some deliberate changes. It does appear to be working. Guidance for the next quarter is actually even faster revenue growth than we saw this most recent quarter. Things are working, but to your point, Travis, this is a company that's been wandering the woods. They're starting to figure some stuff out, but there are also some macro challenges related to what the environment is for its users, the mobile game space. How can this company grapple with these challenges going forward and perhaps get back to not being down 80% for its long-term shareholders? Travis Hoium: I don't know that I have a great answer for this. I think this has been the frustrating thing watching Unity as a business. This is a piece of software that I started to learn a little bit, a handful of years ago when I was in the world of VR. This was the go-to thing. You had to use Unity. It was the best thing to use. That paradigm obviously didn't work out the way I think they hoped. But a lot of the changes that they made to the business and that are showing up now in the income statement are not really businesses that I want to be in as an investor. It's those slimy ads that you see when you're playing a game, or you maybe see your kids see. I know my son will come in and go, "Dad, can I download this game?" I'm like, This looks like a terrible game. It's just built to be able to serve you even more ads to try to get you to download more things. Guess what? Most of those things are coming from Unity. They're touting these developments, they're not the things that I want to invest in. The problem is the core problem for them is that they had a phenomenal platform game engine to be able to create these games, but they had no great way to monetize it. When you don't know how to make money on the thing that you do really well, that's just a really challenging place to be in as a business. Jon Quast: I wonder if that great platform that it did have is really the edge that it is being whittled away at by all the AI tooling that's out there. I know that it's implementing its own AI into its product, but at the same time, you just wonder, and then it does become an ads business, and to your point, is that where you want to be as an investor? You have to make that decision. Tyler, I think one of the challenging things here going forward is stock-based compensation, one thing that's near and dear to your heart, I know, but management here, clinking their champagne glasses, saying it was down at its lowest level at 14% of revenue for the quarter. That's still really high. If you look over the last five years, revenue trailing 12 months is up 89%, but revenue per share is only up 24%. A big part of that is the ongoing dilution. It's going to have to continue to deliver some incredible growth if it's going to continue to provide stock-based compensation at these levels. Right now, it is growing really well with the ads, but is that sustainable? We'll find out. Tyler Crowe: While we're on the topic of mobile gaming, coming up in the next segment, we're going to talk about AppLovin and Celsius Holdings, who are maybe not having the best day today. ADVERTISEMENT: This episode is brought to you by Accenture. 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Tyler Crowe: Two groups of shareholders that probably aren't having as good a time today as Unity Technologies or Celsius Holdings, and AppLovin. Two stocks are both down double digits today, and, while both of them posted relatively decent revenue growth, some of them didn't exactly meet expectations. I gave you assignments for each of them. Travis, you did Celsius, Jon, you did AppLovin. Travis, what did you see in the Celsius report? Travis Hoium: Celsius isn't in such an interesting spot right now because the results were fine, but that's not really what the market was looking for. Revenue was up 11% in the quarter, but you dig underneath that, 21% growth at Alani Nu. That's the company that they bought. I completed that acquisition about a year ago. Now, you're lapping those easier comps. Might remember a couple of quarters ago, you'd see, oh my gosh, 100% growth. That was actually because of that Alani Nu acquisition, and then the Celsius brand is actually down 12% in this quarter. This is showing sure, that the portfolio is doing OK. But the entire space, this energy space, maybe it's like alternatives to traditional soda drinks, is just getting really, really competitive. I know that a handful of years ago, Jon talked about Celsius before we even had it here in Minnesota. Once we started getting it, now suddenly Celsius is everywhere. Well, now I go down those same aisles, and there are a dozen other brands. It's not just Celsius. This isn't a world where Monster and Red Bull dominated everything for what? Two decades. Now, you're getting it's easier and easier to bring up these brands, these co-packers that Celsius was actually grown up on. Remember, they did not own their own manufacturing facilities. They had other companies manufacture their products, and they were just a brand in a sales business. Well, everybody else can just copy that. That's something that we've seen more and more in this space. That's a real challenge. Now, you're going from, is it a growth stock, or is it a value stock, 16 times forward earnings? It's maybe getting close to that value territory, but I don't know, investors just don't seem to know what to think about the company's future. Tyler Crowe: Anecdotally speaking. I live overseas. I've mentioned a couple of times on the show, and when I go to the aisle, I see Red Bull, but other than that, there is no other American comparable. At the same time, there are still 20 different brands. Again, this is an intensely competitive industry where the barriers to entry aren't exactly the hardest in the world. As I mentioned too, Jon, I assigned you to AppLovin. I would say the growth numbers were similar to Unity, but the market did not react nearly as well. Jon Quast: Yes, and it's interesting that you bring up Unity, because at this point, they are more directly competitive than maybe they've been in the past because Unity is growing with the ad network. Really, that's what AppLovin is, same business here. Mobile gaming is the main focus, and that's where they display their ads. That's where they generate their revenue. Up 53% this quarter. That's really good growth, but it is behind what Unity posted. That is worth noting. Also, revenue growth is accelerating, to be fair. It had over 70% growth this time last year. It's also guiding for 47% growth in the upcoming third quarter, so 53% to 47%. It's still really great growth. One of the things I want to point out here is that existing customers' their spend has gone up 28% since the end of last year. That's actually a really meaningful data point, I think, is that the customers who are using them are now spending more than they were to me, that signals that they're getting a return here and are willing to increase that spend. I think that is good. But to be fair, the growth rate is slowing down, so I get it. Trading at 20 times forward earnings, growing at over 40%, profits are growing faster than revenue. You're looking at a 66% net profit margin. I think this is getting a little bit interesting here. Travis Hoium: I also thought it was hilarious that it came up on the conference call that they should change their name. This is one of the most strangely named companies in the market. It does sound like from the movie McLovin I can't get that out of my head every time I hear the company. Sometimes name changes are positive, and interestingly, it's actually being brought up by investors. Jon Quast: The analysts there are mentioning maybe we should change it to MAX, and that is the name of its ad product. To point out, I think another thing investors are responding to negatively today is that it updates its MAX models, its AI models, from time to time. Each time it has done that in the past, it has seen a jump in its revenue growth rate, and this time, releasing the new model still means great growth, but not seeing that uplift right away. I think that's a little bit concerning for investors, especially in light of Unity's results, it's like man, did they not make the right changes that they need to make? I think it just puts a question mark on it. CEO is saying, "We're not changing from AppLovin. We are AppLovin." Tyler Crowe: Stick to your guns. But hey, look, I think the biggest takeaway that we have from this quarter, it wasn't just today's earnings. We've seen this across pretty much the entire earnings season so far. The market seems very demanding right now. We have companies that are posting incredible growth and still getting double-digit declines. Whether that continues, who knows? We seem to be in a very volatile individual stock time. But you know what? That's just how it is with long-term investing. Try to stay the course and plow through when we have all these volatile earnings times, even when the business is doing pretty good. Always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provide for informational purposes only. To see our full advertising disclosure, please check out our show notes. Thanks to producer Dan Boyd and the rest of The Motley team, were Jon, Travis, and myself. Thanks for listening, and we'll chat again soon. Jon Quast has positions in Celsius Holdings, Duolingo, and MercadoLibre. Travis Hoium has positions in Duolingo, MercadoLibre, and Unity Software. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Duolingo, MercadoLibre, Monster Beverage, Salesforce, and Unity Software. The Motley Fool recommends Celsius Holdings. The Motley Fool has a disclosure policy. The Wild Swings of Earnings Season Continue was originally published by The Motley Fool

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. AppLovin stock has fallen sharply in the short term while still showing a very large gain over three years, and the current valuation checks point to neither a clear bargain nor a clear premium. AppLovin has delivered roughly 7x over the past three years, which means many holders are now sitting on sizeable gains even after the recent pullback. Investor expectations for continued growth from the AXON advertising engine can support the current price, while recent revenue shortfalls and analyst downgrades highlight the risk that future growth may fall short of earlier hopes. On Simply Wall St's broader valuation framework, AppLovin scores 4 out of 6 checks, which points to a mixed picture rather than an obviously cheap or clearly expensive stock. The stock's next move may depend on whether recent concerns about growth durability justify a lower valuation or whether the long term earnings potential of AppLovin still supports today's price. Find out why AppLovin's -28.1% return over the last year is lagging behind its peers. The P/E ratio is a useful way to look at AppLovin because the company is currently profitable and widely covered by analysts. Right now AppLovin trades on about 23.9x earnings, which is very close to the broader media industry average of roughly 23.5x. That puts the stock in line with the sector rather than clearly cheap or expensive on a simple sector comparison. Simply Wall St's fair P/E for AppLovin is around 35.3x, based on its growth profile, margins, size and risk factors. This is well above the current multiple. That gap and the large premium to the peer group average of about 50.4x suggest the market is pricing AppLovin below what this framework would expect for its earnings power. Despite the recent downgrades and growth concerns after the revenue miss and guidance update, the P/E still screens as supportive rather than stretched. On the P/E multiple, AppLovin stock currently looks undervalued relative to the earnings level implied by this model. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for AppLovin pick up where this valuation puzzle leaves off by spelling out which future paths for growth, margins and earnings would line up with a much higher or much lower share price than today. Each one sets out a fair value as a clear thesis about AppLovin's business that you can revisit over time to see how well it fits what actually happens, and they sit on the stock's Community page. One of the top community narratives on AppLovin: 51% undervalued Read one of the top narratives on AppLovin Do you think there's more to the story for AppLovin? Head over to our Community to see what others are saying! AppLovin screens as undervalued on the current P/E based framework, although the broader checks are mixed rather than overwhelmingly supportive. The sharp recent move in the share price means sentiment and expectations around the AXON engine now do a lot of the heavy lifting in the valuation. For you as an investor, the key question is whether AppLovin can sustain earnings growth that justifies a sector level multiple or better. The crux of the bull versus bear debate is whether concerns about growth durability prove temporary or whether they point to a lasting ceiling on what the stock should be worth. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include APP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

AppLovin’s second quarter results were met with a significant negative market reaction as revenue and adjusted EBITDA both came in just below Wall Street expectations. Management attributed the shortfall to a slower pace of model improvements within its core gaming advertising business, which CEO Adam Foroughi described as “lighter than normal during the quarter.” Foroughi emphasized that the timing of these improvements, which landed just after quarter end, was the primary factor behind the weaker performance, not a change in advertiser demand or competitive dynamics. He added, “We know what happened, and it’s already been addressed.” Is now the time to buy APP? Find out in our full research report (it’s free). Revenue: $1.92 billion vs analyst estimates of $1.95 billion (52.8% year-on-year growth, 1.2% miss) Adjusted EPS: $3.97 vs analyst expectations of $4.21 (5.7% miss) Adjusted EBITDA: $1.61 billion vs analyst estimates of $1.64 billion (83.9% margin, 1.5% miss) Revenue Guidance for Q3 CY2026 is $2.07 billion at the midpoint, below analyst estimates of $2.08 billion EBITDA guidance for Q3 CY2026 is $1.73 billion at the midpoint, below analyst estimates of $1.75 billion Operating Margin: 77.7%, up from 76.1% in the same quarter last year Market Capitalization: $106.6 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Jason Bazinet (Citi) asked about the strategy behind using partnerships to bring in new advertisers. CEO Adam Foroughi explained that targeted partnerships with analytics firms like Triple Whale are effective for attracting high-quality, mid-market advertisers. James Heaney (Jefferies) sought clarity on the model breakthroughs that were delayed. Foroughi acknowledged that model improvements were less impactful in Q2 but materialized early in Q3, which he expects to drive a rebound. Stephen Ju (UBS) questioned the ability of advertisers to scale spend and whether AppLovin is ready for larger brands. Foroughi responded that mid-market is the current focus due to data and model maturity, with expectations to address the long tail as the platform evolves. Ralph Schackart (William Blair) inquired about diagnosing the lack of model uplift and the long-term margin outlook. Foroughi described the unpredictable nature of R&D and Stumpf reiterated that higher compute costs are justified when they lead to revenue growth. Omar Dessouky (Bank of America) asked about the early results from the public launch of Ads Manager and the approach to onboarding advertisers. Foroughi said that current growth is concentrated among a few high-spending advertisers, with gradual expansion planned as data volume increases. Looking forward, our analysis will focus on (1) the impact of recent model improvements on gaming advertiser spend and platform growth, (2) the pace at which mid-market consumer advertisers are onboarded and drive incremental results, and (3) the effectiveness of ongoing compute investments in boosting model sophistication and revenue. Additionally, we will monitor progress in creative tools, ad format innovation, and the expansion of strategic partnerships as indicators of sustainable growth. AppLovin currently trades at $319.32, down from $417.80 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.