AppLovin's Path To $700

Core Viewpoint - AppLovin (APP) shares have decreased by 5.8% recently, currently trading at $532.56, but the stock is viewed as an attractive investment opportunity with a potential target price of $700 due to its strong operational performance and financial health [2][4]. Valuation - The valuation of AppLovin appears very high compared to the broader market, indicating a premium pricing for the stock [5]. Growth - AppLovin has achieved an average revenue growth rate of 36.0% over the past three years, with revenues increasing by 86% from $3.6 billion to $6.6 billion in the last 12 months [7]. - Quarterly revenues rose by 68.2% to $1.4 billion from $835 million a year earlier [7]. Profitability - The operating income for AppLovin in the last 12 months was $3.5 billion, reflecting an operating margin of 52.5% [8]. - The company generated nearly $2.8 billion in net income, indicating a net margin of approximately 42.7% [8]. Financial Stability - AppLovin's debt stood at $3.5 billion, resulting in a Debt-to-Equity Ratio of 1.9% [9]. - The company has a Cash-to-Assets Ratio of 26.3%, with cash and cash equivalents amounting to $1.7 billion of total assets of $6.3 billion [9]. Downturn Resilience - AppLovin has shown significant underperformance compared to the S&P 500 during economic downturns, with a notable decline of 91.9% from its peak of $114.85 in November 2021 to $9.30 in December 2022 [10][12]. - The stock has since recovered to its pre-crisis peak by September 2024 and reached a high of $733.60 in December 2025 [12].