The article says AppLovin's management has shifted its headline metric from adjusted EBITDA per employee, roughly $3 million at the February 2025 call, to model performance and compute. Operating margin rose to 77.7% in fiscal Q2 2026 from 76.1% a year earlier, while sales grew 52.8% and management said it spends about $0.10 on compute per incremental dollar of revenue. The author argues near-term growth depends mainly on model improvements that management cannot guarantee each quarter, making fiscal Q3 2026 revenue growth against its 46% to 48% guidance, due in November 2026, worth watching. The stock trades at 19.9 times trailing twelve-month earnings versus 22.9 for the S&P 500.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
AppLovinadvertisingvaluationearnings
Open a keyword to see other news on the same topic.
Related news
- AppLovin Has Dropped 60% in 2026: One Wall Street Pro is Convinced It Will Triple in Price
AppLovin trades at $260.25, down 61.38% year to date, after second-quarter revenue of $1.92 billion missed estimates by 0.94% and adjusted EBITDA fell below guidance on higher computing costs. CEO Adam Foroughi attributed the miss to a slower pace of model improvement, and Wells Fargo, Piper Sandler and Bank of America all downgraded the stock, while a securities class action added pressure. Even so, Q2 revenue grew 52.8% year over year, net income reached $1.27B and free cash flow was $863M, and Q3 revenue guidance is $2.055B-$2.085B. The average analyst target of $476.85 implies 83.2% upside, while UBS's Stephen Ju has the highest target at $790.00 and expects the stock to about triple. The article notes that the next earnings report will be the first real test of the recovery case.
- Are You Overpaying For AppLovin Stock Versus Its Rivals?
AppLovin shares have fallen more than half over the past year and trade at 20.0 times earnings, below Meta Platforms and Magnite. Over the latest four fiscal quarters, the company posted 60.6% revenue growth and kept 77.4% of revenue as operating profit, compared with 8.3% and 15.6% for Magnite. Revenue growth has slowed each quarter, from 68.2% in fiscal Q3 2025 to 52.8% in fiscal Q2 2026, and management guided for 46% to 48% growth in fiscal Q3 2026. The growth is driven by improved ad models that AppLovin is now selling to advertisers outside gaming, including through its Ads Manager platform. The article concludes that investors are not overpaying for AppLovin and says the fiscal Q3 2026 revenue report will be the key measure to watch.
- AppLovin vs. Pinterest: Which Stock Is a Better Buy in 2026?
This comparison pits AppLovin (APP), a software provider that helps mobile apps grow and monetize, against Pinterest (PINS), a visual discovery and shopping platform. AppLovin's FY 2025 revenue was nearly $5.5 billion, up 70%, with net income of about $3.3 billion and a 60.8% net margin; its risks include limits on data from Apple and Alphabet, securities class actions and a legal challenge over inappropriate ads reaching children. Pinterest's FY 2025 revenue reached about $4.2 billion, up 15.8%, with net income of $416.9 million and a 9.9% net margin; its risks include dependence on user engagement, search algorithm changes and reliance on Amazon for cloud infrastructure. Pinterest has the lower P/S ratio, while AppLovin trades at a higher forward P/E. The author favors AppLovin for Q2 2026 revenue growth above 50%, despite a slight revenue miss and a sharp stock drop after the report, and views Pinterest as a long-term story with 18% Q2 revenue growth.
- What Does AppLovin Offer That Omnicom Does Not?
Omnicom sells agency work across media, advertising and PR, while AppLovin runs its own ad platform, mostly for games. Over the past year AppLovin stock fell 52% while Omnicom returned 6.9%, even though AppLovin grew revenue faster, and Omnicom raised its 2026 organic growth forecast after 6.1% organic growth in the second quarter. AppLovin's second-quarter profit measure came in just below its forecast range, which management attributed to timing, and it expects third-quarter 2026 revenue to rise 46% to 48%, its first forecast for the quarter rather than a raise. Omnicom carries debt equal to 52% of its market value versus 3.8% for AppLovin, and AppLovin trades at 20.7 times trailing earnings versus 56.3 for Omnicom, with an operating margin of 77% against Omnicom's 5.3%. The article calls AppLovin's November 4, 2026 report, especially its third-quarter revenue against its August forecast, the key metric to watch.
- 6 , 733 AppLovin Corporation $APP Shares Acquired by Yousif Capital Management LLC
Yousif Capital Management LLC raised its AppLovin stake by 27.3% in the third quarter, to 31,359 shares worth $9,108,000 per its latest SEC filing. AppLovin opened at $260.25 on Friday, well below its one-year high of $738.01, with a market cap of $87.09 billion. Law firms have publicized a securities class action against AppLovin and some executives over alleged misleading statements about its AI advertising models between February 12 and August 5, 2026; the allegations have not been proven, and investors have until November 16, 2026 to seek lead plaintiff status. Second-quarter revenue was $1.92 billion, up 52.8% year over year but slightly below the $1.94 billion analyst estimate. Citigroup cut its price target from $600.00 to $500.00, while Oppenheimer lowered its target from $560.00 to $490.00.
- Alphabet faces UBS target cut as Search and YouTube miss forecasts
UBS cut its price target on Alphabet to $332 from $380 but kept a 'neutral' rating, citing weaker advertising growth and concerns over cloud margins. The shares fell 13% on Thursday after third-quarter revenue came in below expectations, with Search at $63.4 billion against a consensus of $64.9 billion and YouTube at $11.2 billion against $11.4 billion. UBS lowered its 2026 Search revenue forecast to $257.1 billion from $260.8 billion and its YouTube ad estimate to $44.4 billion from $45.4 billion, reflecting management's measured approach to revenue from additional AI queries. Cloud revenue beat market expectations but missed UBS's estimates, while backlog reached $561 billion, above the broker's $538 billion forecast. UBS raised its 2027 diluted EPS forecast to $21.03 from $19.11 but cut its 2028 forecast to $11.49 from $13.75.
Related markets
Latest news
- Amazon Just Lost $42 Billion in Free Cash Flow. Is It a Red Flag for Investors?
Amazon posted strong growth in the quarter, with revenue up 17% to $201.9 billion after adjusting for foreign exchange and the Prime Day shift, and operating income up 61% to $28.1 billion. Yet the stock fell 1.4% in the regular session and tumbled about 7% after hours, as investors are skeptical of its massive AI-related capital expenditure, planned at $220 billion this year. In the third quarter alone, Amazon reported a free cash flow loss of $33.4 billion while spending $77.3 billion on property and equipment, and it has burned $42 billion in free cash flow over the last four quarters. The article says this equals 5.4% of trailing revenue, comparable to past cycle peaks such as 4.8% in 2022. Amazon forecasts 40% AWS growth over the next two years, and the author argues the spending could pay off through AWS.
- Why Arm Holdings Stock Plummeted by Nearly 10% Today
Arm Holdings shares fell almost 10% in Friday's session amid a broad sell-off in semiconductor stocks. The trigger was Intel's third-quarter report: although revenue grew in double digits and its data center and AI unit gained substantially, its fourth-quarter guidance was unexpectedly weak, forecasting sequential declines in revenue, gross margin and non-GAAP earnings per share, well below analyst estimates. Many chip stocks fell heavily, with Intel's outlook seen as a warning sign for the sector. The author argues markets tend to overreact and that Arm faces risks from the current contraction in PC shipments and rising component costs, though its asset-light licensing model may leave it less exposed than Intel. The author says they are waiting for Arm's fiscal second-quarter 2027 results, scheduled for Wednesday, Nov. 4 after market close.
- Is Intel Stock a Buy After Its Post-Earnings Plunge?
Intel shares fell sharply after hours on Thursday, from a $92.07 regular-session close to about $71, following third-quarter results. Revenue rose 21% year over year to $16.5 billion and adjusted EPS of $0.52 beat guidance, but the fourth-quarter outlook of $15.0–16.0 billion in revenue and $0.25 in EPS was weaker. Data center and AI revenue jumped 78% to $7.3 billion, while PC-related revenue fell 5% to $8.1 billion. Intel expects PC segment revenue to drop over 20% next quarter as industry PC units shrink about 12% in 2026 and 10% in 2027, and an accident that shut its Fab 28 plant in Israel also weighs on results. The author judges it is not yet time to buy, given the stock trades near 33 times expected 2027 earnings and the diluted share count is expected to be about 20% above the third quarter of 2025.
- Elon Musk 'trolls' over Binance hack, CZ bluntly says: 'I deeply respect you, please stop'
Binance co-founder Changpeng Zhao (CZ) asked Elon Musk to stop 'trolling' the exchange after the SpaceX and Tesla CEO posted emoji that appeared to mock the cyberattack on Binance, which caused losses of 6.3 billion USD on October 29. CZ pointed out that Binance holds SpaceX shares worth over 1 billion USD, stemming from its 500 million USD investment in Musk's Twitter acquisition, though this is a tiny fraction of SpaceX's valuation of about 2,000 billion USD. The feud is not new: in November 2021, Musk called Binance's temporary suspension of Dogecoin withdrawals 'shady', and CZ responded by citing Tesla's recall of nearly 12,000 vehicles in the US.
- Jim Cramer says it's time to look beyond tech. Here are 4 consumer stocks he likes
CNBC's Jim Cramer said investors seeking to diversify away from the struggling AI trade should consider consumer staples stocks. In October the Nasdaq-100 fell almost 7% as money rotated into defensive sectors, while the consumer staples index rose 11.4%. Cramer highlighted four stocks: Kimberly-Clark (up nearly 11% in October, under 15 times earnings, 4.7% dividend yield, with a pending merger with Kenvue); Procter & Gamble (up 11%, seen as attractive after better-than-expected quarterly results, though he prefers Kimberly-Clark's lower valuation and higher yield); Constellation Brands (up 20%, about 11 times earnings, yield above 3%, showing signs of a turnaround); and Coca-Cola (up 9%, after a strong quarter driven by volume).
- Why Bright Horizons Family Solutions Stock Swooned on Friday
Bright Horizons Family Solutions (BFAM) stock fell almost 18% on Friday after the child care company cut its 2026 guidance. For the third quarter, revenue of nearly $841.5 million rose almost 5% year over year, and adjusted EPS of $1.80 beat the $1.76 analyst estimate, though revenue missed the roughly $842.7 million consensus. Full-year 2026 revenue is now expected at about $3.07 billion, down from almost $3.09 billion to just under $3.12 billion, and adjusted EPS guidance was lowered to $4.98–$5.03 from $5.05–$5.15. Management attributed the cuts to an ongoing UK regulatory safeguarding notice and a softening child care market in Australia, which prompted an internal review of strategic alternatives for that business. The article notes the stock looks cheap on valuation metrics but needs growth from its full-service centers and a resolution of the Australia situation to draw renewed investor interest.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.