AppLovin Shares Crash Despite Stellar Growth. Is It Time to Buy the Stock on the Dip?

Core Insights - AppLovin reported strong fourth-quarter growth with a revenue increase of 66% to $1.66 billion, but its stock has dropped over 40% this year [1][2] Financial Performance - Earnings per share (EPS) surged 87% from $1.73 to $3.24, while adjusted EBITDA soared 82% year over year to $1.4 billion [3] - The company generated free cash flow of $1.3 billion in Q4 and $3.95 billion for the full year, reducing net debt from $2.8 billion to $1 billion [4] Operational Efficiency - Gross margin improved to 88.9% from 84.7% a year ago, and operating costs were reduced by 9%, including a 21% decrease in sales and marketing expenses [2][4] Future Outlook - For Q1, AppLovin projected revenue between $1.745 billion and $1.775 billion, indicating growth of 50% to 53%, with adjusted EBITDA forecasted between $1.465 billion and $1.495 billion [5] - The company plans to launch a self-service e-commerce platform and is piloting AI tools to automate the creative process for video ads, presenting potential growth opportunities [9]