APP
AppLovin Corporation
$260.25
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 27.1% below fair value
You pay
$260.25
Bear
$218.47
Fair
$356.75
Bull
$515.93
Bear
$218.47
-16.1%
10% stage 1 growth, 12% discount
Fair
$356.75
+37.1%
17% stage 1 growth, 12% discount
Bull
$515.93
+98.2%
22% stage 1 growth, 12% discount
Adjust Assumptions
16.6%
12.0%
3.0%
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
40%
Implied Market Multiple
22.3x
Market is pricing in (growth)
12.3%
vs 16.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$511.53
Divergence from AlphaVal
30%
Summary
Using a two-stage FCF DCF with 17% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $356.75 per share.
Warnings
Wall Street's average price target is $511.53 (from 27 analysts). Our estimate is 30% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions