AppLovin (APP) Valuation Check as Axon 2 AI Drives Analyst Confidence in Long-Term Growth Potential

Recent analyst commentary around AppLovin (APP) is really centered on one thing: the Axon 2 AI platform quietly reshaping its ad business across mobile apps, e commerce, connected TV, and streaming.

See our latest analysis for AppLovin.

That backdrop helps explain why, even with a recent pullback that left the latest share price at $670.67 and a 1 day share price return of minus 6.46 percent, AppLovin still shows a year to date share price return of 96.23 percent and a three year total shareholder return of 69.75 percent. This suggests momentum remains firmly positive as Axon 2 gains traction and upcoming tech conferences keep the growth narrative in focus.

If Axon 2 has you rethinking what scalable software growth can look like, it may be worth exploring high growth tech and AI stocks as potential next wave candidates.

With Axon 2 accelerating growth, Jefferies lifting its target to $860, and shares still trading below consensus, is AppLovin quietly undervalued here, or is the market already baking in years of AI driven upside?

Most Popular Narrative: 7.9% Undervalued

With the narrative fair value sitting at 728.25 dollars versus AppLovin's last close of 670.67 dollars, the story leans toward upside driven by aggressive profit expansion and premium earnings assumptions.

The future P/E multiple has fallen slightly from about 40.25 times to 39.52 times, suggesting a modest easing in the valuation premium applied to forward earnings.

Revenue growth has risen slightly from roughly 23.55 percent to 24.62 percent, indicating a small upgrade to top line expansion expectations.

Read the complete narrative.

Want to see what kind of earnings machine justifies that rich future multiple and upgraded growth path? The narrative leans on bold compounding and fat margins. Curious how far those assumptions really stretch valuation? Explore the full roadmap behind this fair value estimate.

Result: Fair Value of $728.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, tighter global privacy rules and intensified competition from digital ad giants could quickly compress AppLovin's margins and challenge these bullish growth assumptions.

Find out about the key risks to this AppLovin narrative.

Another View: Rich Multiples, Different Story

Strip out the narrative fair value and the current earnings multiple paints a tougher picture. At about 77.7 times earnings versus 32.9 times for US software peers and a 56.7 times fair ratio, the stock looks stretched. This raises the question: how much AI upside is already priced in?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own AppLovin Narrative

If these perspectives do not quite fit your view, take a closer look at the numbers and create your own narrative in just a few minutes, Do it your way.

A great starting point for your AppLovin research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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