Could AppLovin Stock Help You Become a Millionaire?

Core Insights - AppLovin has transitioned from a mobile game publisher to a highly profitable ad tech company, resulting in a stock price increase of over 500% in the last year [1][3] - The advertising business is the primary growth driver, with Q4 revenue rising 44% to $1.37 billion and advertising revenue increasing 73% to $999.5 million [2] - The company is selling its mobile games business for $900 million while retaining a minority stake [1] Financial Performance - AppLovin reported adjusted EBITDA of $848 million and GAAP net income of $599.2 million, achieving a profit margin of 44% [2] - For Q1, the company expects revenue between $1.3 billion and $1.5 billion, indicating more than double the growth from the same quarter last year [7] - Projected adjusted EBITDA for Q1 is between $805 million and $825 million, showcasing the business model's profitability [7] Market Expansion - AppLovin is expanding its ad business beyond gaming into new verticals such as e-commerce, fintech, and automotive [5][6] - The company has identified an addressable market of over 10 million businesses that could benefit from its platform [5] - Plans include enhancing technology with AI models and launching a self-serve dashboard similar to offerings from competitors [6] Valuation and Market Position - AppLovin's stock trades at a price-to-sales ratio of 28 and a price-to-earnings ratio of 83, which is considered reasonable given its growth rate [8] - Despite mixed results from direct-to-consumer brands testing the platform, the company is focused on improving its product [9] - 2025 is anticipated to be a critical year for AppLovin, with high expectations for maintaining growth and margins [10][11]