Parkev Tatevosian, CFA on $APP (Oct 30, 2026)
After revenue came in below management's minimum forecast and the company said costs would rise, AppLovin fell to $263, near its $255 52-week low. Even after cutting his free-cash-flow estimates and updating his DCF, the speaker still sees it as undervalued, with fair value of $354 implying about 35% upside in 12 to 18 months.
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The next stock I will highlight is AppLovin, which had a great 2025 in which its stock price rose, but 2026 was much more challenging.
The company recently announced revenues below the minimum forecast provided by management, and also told investors that its costs would be rising. Therefore, this double blow caused great pessimism among investors, and the stock price fell to near its lowest level in 52 weeks at $263.
Remember that the lowest level in 52 weeks is $255.
Based on the revised estimates provided by the management team, I updated the company's discounted cash flow model and lowered my expectations for the amount of free cash flow I expect the company to generate .
However, even after making those adjustments, the stocks appear to be undervalued.
I calculated the fair value of the company at $354 , and compared to the current market price , there appears to be potential for an upside of about 35% over the next 12 to 18 months .
What this channel has said about $APP
Parkev Tatevosian, CFA has 2 calls on this stock; only the adjacent ones are shown.