Shares of AppLovin Are Getting Crushed. Time to Buy?

Core Viewpoint - AppLovin's stock has experienced a significant decline of 48% since December 2025, raising questions about whether it has become an attractive investment opportunity [2]. Financial Performance - AppLovin reported strong fourth-quarter results for 2025, with revenue increasing by 66% year over year to nearly $1.7 billion, leading to a full-year revenue of approximately $5.5 billion, which is a 70% increase year over year [5]. - The company's net income for the fourth quarter rose by 84% year over year to $1.1 billion, while the full-year net income increased by 111% to $3.3 billion [5]. - Free cash flow for 2025 was $3.95 billion, up from $2.1 billion in 2024, representing 72% of its revenue [6]. Business Momentum - AppLovin is benefiting from advancements in artificial intelligence, which are expected to contribute to continued business growth [7]. Revenue Guidance - For the first quarter of 2026, AppLovin has guided revenue to be between $1.745 billion and $1.775 billion. Adjusting for the divestiture of its mobile gaming business, this guidance implies a year-over-year revenue growth of approximately 52% [9].