APP
AppLovin Corporation
$481.68
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 15.1% above fair value
You pay
$481.68
Bear
$256.14
Fair
$418.37
Bull
$605.12
Bear
$256.14
-46.8%
10% stage 1 growth, 12% discount
Fair
$418.37
-13.1%
17% stage 1 growth, 12% discount
Bull
$605.12
+25.6%
22% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
40%
Implied Market Multiple
43.0x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $652.20 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $418.37 per share.
Warnings
Wall Street's average price target is $652.20 (from 26 analysts). Our estimate is 48% 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