Shares of AppLovin (APP, Financial) experienced a significant movement today, rising 4.23%. This increase was driven by the company's CEO, Adam Foroughi, addressing recent concerns raised by short-seller Muddy Waters regarding AppLovin's ad targeting methods and competitiveness. Foroughi emphasized that the report by the short-seller was biased through omission rather than based on solid evidence.
AppLovin Corp (APP, Financial) recently closed at a stock price of $272.76. Despite the recent 4.23% increase, the company's valuation presents a mixed picture. According to the GF Value, AppLovin is currently considered to be "Significantly Overvalued," with a GF Value of $72.44. For more details on the GF Value, see the GF Value page for APP on the GuruFocus website.
Examining the company's financial health, AppLovin has a Piotroski F-Score of 7, indicating a very healthy financial situation. Additionally, the Altman Z-Score of 13.44 suggests a strong financial position. The Beneish M-Score of -2.58 further implies that the company is unlikely to be manipulating its earnings.
However, there are certain warning signs to consider. The company's assets have grown faster than its revenue over the past five years, which might imply decreased efficiency. Additionally, the company has been experiencing insider selling activity, with five insider selling transactions and no insider buying in the past three months, totaling 172,500 shares sold.
AppLovin's key financial metrics show a price-to-earnings (P/E) ratio of 60.08 and a price-to-book (P/B) ratio of 84.97, suggesting that investors may be paying a premium for the stock. The company's net margin is a healthy 33.55%, and its operating margin stands at 39.78%. With a debt-to-equity ratio of 3.26, AppLovin leverages its capital structure significantly.
The market capitalization of AppLovin currently stands at approximately $92.7 billion, with a beta of 2.17, indicating high volatility. Investors should weigh these factors when considering the stock's potential risks and rewards.
