Should I Buy AppLovin (APP)? Finance YouTuber Analysis

The YouTuber is bullish on Apploving, arguing it's a mispriced ad tech infrastructure company with a powerful AI-driven 'black box' system (Axon 2) that delivers superior results for advertisers. They highlight its elite profit margins (42.3% net, 50.5% FCF), high return on invested capital (64.3%), and efficient sales per employee, indicating a strong, compounding business model that is ditching lower-margin gaming segments. Despite a significant run-up, the YouTuber believes the market still misunderstands its core value proposition and competitive moat.

“My thesis is bullish. The risk is there, no question. But the reward is scaling, and the engine is compounding. That's why I'm looking to buy the stock and plan on selling a cash secured put today.” — ▶ 12:40

The YouTuber recommends AppLovin, a mobile tech company with little competition, for its strong revenue and margin growth. He advises buying only on major dips, citing a recent example where the stock dropped 2% and then bounced back 4%, emphasizing patience for pullbacks in smaller companies.

“This is a stock that I only buy on major dips. And two weeks ago, it happened to drop 2% in just one day. And then of course, it bounced back 4% the next.” — ▶ 14:30

Despite analysts projecting a 0% upside, the YouTuber believes AppLovin will perform well, noting its strong revenue and margin performance. He anticipates a stellar Q4 due to increased marketing spending during that period, which should provide momentum into 2025.

“But this is one that I think the analysts might have this a little wrong and the reason I say that is because when I look at the L earnings they have figured it out with their revenue and their margin and I'm guessing that Q4 is probably going to be Stellar for them due to the simple fact that in the basics of marketing everyone starts spending in Q4 and that should give them some solid momentum going into 2025 for that reason I agree with Congress on this particular pick even though analysts are a little bit less sure” — ▶ 7:00

The YouTuber is buying AppLovin due to its strong financial turnaround, with earnings per share and free cash flow becoming positive and growing. The company's net margins have significantly improved, driven by its software division and strategic use of AI in advertising and marketing, indicating a healthy and growing business.

“when I look at the financials you'll see why I jumped on the stock last year and why I'm still buying it this year their earnings per share had been running negative for years and then last year it finally flipped to be positive and continued to grow each quarter” — ▶ 3:00

The analyst acknowledges AppLovin's strong performance driven by its shift to a software platform and growth in non-gaming sectors like e-commerce, leading to multiple expansion. However, the current valuation (P/E over 100, forward P/E 62, EV/Sales 28) is high, and the analyst questions if the rapid growth rate can be sustained, making it a company to 'keep an eye on' rather than a clear buy.

“I think App 11 has a phenomenal opportunity to grow ahead as there is more e-commerce as there is more opportunities to build these advertising platforms that are outside of the traditional ecosystems but is this rate of growth going to continue we'll have to see because if it doesn't that's going to be the risk for investors.” — ▶ 19:40

The YouTuber highlights AppLovin as a profitable growth stock specializing in mobile ad tech, particularly praising its AI-powered Axon 2 platform. The company has shown strong revenue growth (48% overall, 91% in software) and increased profitability (net profit margin over 22%). With a free cash flow ratio of 23 and a forward P/E of 21, the stock appears undervalued given its growth potential, especially as it expands beyond gaming apps.

“Ich überlege derzeit eine Position aufzubauen und so mein Depot im Bereich ver Werbung neben Alphabet weiter zu diversifizieren” — ▶ 9:20