APP · AppLovin
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $350
Note written ·
Price against the kill line
16.9% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $350.00, on record since 10 November 2026. The shares are up 31.1% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $350, under the $356.10 close of 5 November 2026 and between the $347 Wells Fargo and $355 Piper Sandler targets, which would erase most of the post-report gain. Fourth-quarter 2026 revenue below the $2,365 million low end of guidance would also break the case.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 2,185
- Revenue, change on a year (%)
- +55.5
- Gross margin (%)
- 89.0
- Operating margin (%)
- 78.2
- Net cash, cash less debt ($M)
- −342
- Price to earnings (×)
- 27.3
- Enterprise value to sales (×)
- 18.0
- Enterprise value to operating income (×)
- 23.2
All filed numbers
What AppLovin reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 2,185 | +55.5 | 89.0 | 78.2 |
| first filed | 1,924 | +52.8 | 88.3 | 77.7 |
| first filed | 1,842 | +59.0 | 88.9 | 78.2 |
| first filed | 1,658 | — | 88.9 | 76.9 |
| first filed | 1,405 | — | 87.6 | 76.8 |
| first filed | 1,259 | — | 87.7 | 76.1 |
| Pre-tax income ($M) | 1,744 |
| Net income ($M) four quarters: 5,013 | 1,439 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −1.8 |
| Operating cash flow ($M) | 4,903 |
| Capital spending ($M) | Not reported |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 3,174 |
| Debt ($M) non-current long-term debt | 3,516 |
| Net cash, cash less debt ($M) | −342 |
| Deferred revenue ($M) at 31 December 2025, filed 19 February 2026; +28.7% on a year | 47.7 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 2,389 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 3,299 |
| Market value ($M) | 136,954 |
| Enterprise value, market value plus net debt ($M) | 137,296 |
| Enterprise value to sales (×) | 18.0 |
| Enterprise value to operating income (×) | 23.2 |
| Price to earnings (×) | 27.3 |
| Price to book value (×) | 41.5 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.3% of shares outstanding sold short, 2.2 days of average trading to cover, −3.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $450.7M |
The thesis
AppLovin's third-quarter 2026 report put growth back on track: revenue rose 55% to $2.185 billion, above the $2.07 billion midpoint of the company's August guidance. The fourth-quarter report, expected around February 2027, settles whether the ad models, so far only partly rolled out, keep growth above the 43–44% the company has guided.
The case rests on AppLovin's ad-targeting models for mobile games and, increasingly, for advertisers outside gaming. In its 8-K exhibit dated 4 November 2026, the company reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation, as adjusted by the company) of $1,842 million, an 84% margin, and free cash flow of $1,418 million. That cash pays for buybacks of a size few software companies match.
The rating is Medium because the third quarter answered the August miss with a dated number, while the fourth-quarter guide already implies slower growth and the shares have recovered fast. The price reflects a recovery, not a return to peak expectations: the shares closed at $393.68 on 12 November 2026, 46.7% below the 52-week intraday high of $738.01 set on 22 December 2025.
Bullish and bearish views on AppLovin Corporation
The bull case on AppLovin Corporation (APP), in brief: sequential growth beat the company's own pace. The bear case: fourth-quarter guidance implies slower growth.
Bull case
- Sequential growth beat the company's own pace. Third-quarter revenue grew 14% from the second quarter, according to StockAnalysis on 5 November 2026. The August guidance midpoint of $2.07 billion had implied about 7.8% sequential growth.
- Cash generation funds large buybacks. In the third quarter AppLovin spent about $1.4 billion to repurchase or withhold 4.1 million Class A shares, and the board raised the authorisation to $3.6 billion (8-K exhibit, 4 November 2026).
- The model rollout is incomplete. On the 4 November 2026 call, CEO Adam Foroughi said only part of the next-generation ad models has been deployed. He gave no date for the full rollout.
- Advertisers outside gaming are growing. Spending by consumer advertisers outside gaming rose by double digits from the second quarter, according to StockAnalysis on 5 November 2026.
- Outperform-rated brokers raised targets. On 5 November 2026, RBC Capital raised its target to $520 and Macquarie to $470, both rating the shares Outperform, according to Benzinga.
Bear case
- Fourth-quarter guidance implies slower growth. The company guided fourth-quarter revenue to $2,365–$2,395 million, 43–44% year-over-year growth against 55% in the third quarter (8-K exhibit, 4 November 2026). CFO Matt Stumpf attributed the step-down to seasonality and added compute spending.
- Some targets are falling, not rising. Phillip Securities cut its target to $470 from $610 on 10 November 2026, according to Fiscal.ai, and Scotiabank cut its target to $450 on 5 November 2026. Wells Fargo ($347, Equal-Weight) and Piper Sandler ($355, Neutral) set targets on 6 November 2026 that sit below the 12 November 2026 close of $393.68.
- The August miss shows how fast the shares can fall. Second-quarter revenue of $1.92 billion missed a $1.94 billion consensus, and the shares closed down 19.66% at $335.67 on 6 August 2026, according to a Levi & Korsinsky notice published through Business Wire.
- A securities class action is pending. The suit covers buyers from 12 February to 5 August 2026 and alleges management overstated the pace of model improvement and did not disclose a delay to a generative-AI video tool; the lead-plaintiff deadline is 16 November 2026.
- Regulatory and short-seller questions follow the company. Reuters reported in February 2026 that an SEC inquiry into AppLovin's data practices was "still active and ongoing"; Stocktwits later quoted CFO Matt Stumpf saying the agency "concluded its inquiry with no recommended action." CapitalWatch published allegations in January 2026 that AppLovin called "false, misleading, and nonsensical."
Price setup
The shares closed at $356.10 on 5 November 2026, the first session after the report, then $391.22 on 6 November 2026 and $410.00 on 9 November 2026. They have since eased to $404.77 on 11 November 2026 and $393.68 on 12 November 2026. The 3-month change is +24.8% from the $315.44 close of 14 August 2026.
On adjusted daily closes as of 12 November 2026, the 50-day moving average is $300.22 and the 200-day moving average is $406.60. The shares sit just under the 200-day average after briefly closing above it on 9 November 2026 and 11 November 2026. The 52-week closing low is $228.50 on 30 October 2026, four sessions before the report.
SEC Form 4 filings dated 2 November 2026 record stock awards granted on 29 October 2026, among them 273,691 shares to CTO Xiaochuan Ge and 128,055 shares to CEO Adam Foroughi; they record no open-market purchases. No earnings date falls in the 30 days after 12 November 2026.
Catalysts ahead
- ~11 February 2027 (est.): Fourth-quarter 2026 report. Shows whether revenue lands inside the $2,365–$2,395 million guidance and whether the partly deployed ad models lift growth beyond the guided 43–44%.
What would change the view
A daily close below $350, under the $356.10 close of 5 November 2026 and between the $347 Wells Fargo and $355 Piper Sandler targets, which would erase most of the post-report gain. Fourth-quarter 2026 revenue below the $2,365 million low end of guidance would also break the case.
The risks this note tracks, each with what would confirm it:
- Growth slows faster than guided as the model-driven gains from the third quarter fade. Confirmed by: fourth-quarter revenue sequential growth under 8%, or a first-quarter 2027 revenue guide implying year-over-year growth below 40%, at the early-2027 report.
- The securities class action over statements made between February and August 2026 advances. Confirmed by: a court denying AppLovin's motion to dismiss, or a settlement or loss accrual disclosed in a 10-Q or 10-K.
- Regulatory scrutiny of the company's data-collection practices returns. Confirmed by: a disclosed SEC or other regulatory enforcement action, or a platform partner restricting AppLovin's data access.
- A broad sell-off in AI-linked technology stocks drags the shares regardless of results. Confirmed by: further multi-percent Nasdaq declines like the AI sell-off of 5 November 2026, with AppLovin falling alongside.
- Short-seller allegations resurface and gain traction. Confirmed by: a new short report followed by an auditor, regulator or partner response that validates any of its claims.
What it trades with
AppLovin trades with high-growth Nasdaq technology and AI names. Benzinga reported on 5 November 2026 that the VIX volatility index jumped 39% as an AI-stock sell-off erased $2.2 trillion in market value, the backdrop to AppLovin's post-report gain. Its revenue depends on mobile-game advertiser budgets, which ties it to the game-engine and ad peer Unity Software. Quarterly results from Meta and Alphabet act as a read-across for digital advertising demand.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $2,185 million, up 55% from $1,405 million a year earlier; net income was $1,439 million and diluted EPS $4.30. AppLovin 8-K exhibit 99.1, Q3 2026 results · as of
- Third-quarter 2026 adjusted EBITDA was $1,842 million at an 84% margin; free cash flow was $1,418 million. AppLovin 8-K exhibit 99.1, Q3 2026 results · as of
- Fourth-quarter 2026 guidance: revenue $2,365–$2,395 million and adjusted EBITDA $1,995–$2,025 million at an 84–85% margin. AppLovin 8-K exhibit 99.1, Q3 2026 results · as of
- AppLovin repurchased or withheld 4.1 million Class A shares for about $1.4 billion in Q3 2026; the board raised the authorisation to $3.6 billion. AppLovin 8-K exhibit 99.1, Q3 2026 results · as of
- Cash and equivalents were $3,174 million and long-term debt $3,516 million at quarter end. AppLovin 8-K exhibit 99.1, Q3 2026 results · as of
- Second-quarter 2026 revenue of $1.92 billion missed a $1.94 billion consensus; the shares closed down 19.66% at $335.67. Levi & Korsinsky class-action notice via Business Wire · as of
- RBC Capital raised its AppLovin target to $520 and Macquarie to $470 (both Outperform); Scotiabank cut its target to $450. Benzinga analyst rating headlines · as of
- Phillip Securities cut its AppLovin target to $470 from $610; Wells Fargo ($347) and Piper Sandler ($355) raised targets on 6 November 2026. Fiscal.ai and Benzinga analyst headlines · as of
Sources
- AppLovin Corp - Form 8-K - FY2026 · sec.gov ·
- AppLovin's Q3 revenue grows 55% to $2.18B, sending stock soaring after hours · stockanalysis.com ·
- APP Shareholder Alert: November 16, 2026 Lead Plaintiff Deadline in AppLovin Corporation Securities Class Action - Contact Levi & Korsinsky · webull.com ·
- Applovin (APP) Q3 2026 earnings summary · quartr.com
- APP Stock Plunges 28% After-Hours On Revenue Miss And Soft Guidance — But CFO Says SEC Probe On Firm Now Closed · stocktwits.com
- AppLovin faces SEC probe as data practices come under fire · emarketer.com
- AppLovin shares tumble as revenue miss and cautious outlook outweigh earnings beat · finviz.com
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