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AppLovin (APP): winning in new verticals?

Writer: Abacus Research
Abacus Research
Jun 5, 2025
1 min read

We see APP as a high quality business with a sustainable competitive advantage.

  • The company has high growth, high FCF generation, low SBC dilution, limited debt, 70% + EBITDA margins, incremental EBITDA margins of >90%.


APP is a play on AI and APP's ability to expand into new verticals, currently D2C ecommerce.

  • AI engineers at APP have proven their dominance in the gaming advertising vertical and are expanding into other verticals, we think they probability of success is high.

  • APP has high growth, with options on faster growth in 2025 and 2026, particularly the launch of self-service tools in Q2 2025.

  • FCF growth into 2027 has the potential to be very rapid and the market has not given APP full credit for this yet.


Potential Upside:     $635 (+52%)

Sensible Downside: $270(-35%)


 
 
 

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