Applovin Outlook - Strong Technicals But Mixed Fundamentals

Market Snapshot

Takeaway: Applovin (APP.O) has seen a strong technical uptrend, but fundamentals remain mixed. Recent price gains of 23.89% indicate optimism, but the company’s internal diagnostic score on fundamentals is a modest 2.91, suggesting caution.

News Highlights

Recent headlines have centered on broader market trends rather than Applovin-specific events. Here are two key stories that might influence sentiment:

• U.S. Vaccine Policy Shifts: The Department of Health and Human Services has revised its approach to COVID-19 vaccine approvals, potentially impacting sectors like pharma and biotech. While not directly relevant to Applovin, shifts in public health policy could affect consumer spending trends.
• Trump’s Tariff Announcements: President Trump has continued to make headline-grabbing tariff announcements, creating uncertainty in global markets. These moves could indirectly affect Applovin's mobile ad and app performance platforms, especially if global ad spending trends shift in response to trade tensions.

Analyst Views & Fundamentals

Average Rating Score (simple mean): 4.50

Weighted Rating Score (performance-weighted): 5.40

Rating Consistency: Analysts are somewhat divided, with a mix of Strong Buy, Buy, and Neutral ratings. However, the overall sentiment is optimistic with 5 out of 6 recent ratings being positive.

Key Fundamental Factor Values and Scores:

• Net Profit / Total Profit: 83.16% (score: 2.91)
• ROE (diluted) (YoY growth rate): 110.42% (score: 2.91)
• Net Assets per Share (growth rate YoY): 7.49% (score: 2.91)
• Operating Cycle: 106.65 days (score: 2.91)
• Inventory Turnover Days: 321.69 days (score: 2.91)
• Long-Term Debt to Working Capital Ratio: 1.95% (score: 2.91)
• Profit-MV: -0.57 (score: 2.91)
• Cash-MV: -0.83 (score: 2.91)
• Cash-UP: -0.00 (score: 2.91)
• Net Profit Margin (NPM): 65.11% (score: 2.91)

While analyst ratings suggest optimism, the fundamental model scores are relatively low. The mismatch between strong technical indicators and weaker fundamentals suggests a need for closer watch on earnings and cash flow developments.

Money-Flow Trends

Recent money-flow trends for Applovin show mixed signals. The fund-flow score is 7.75 (internal diagnostic score, 0-10), which is considered "good." However, the overall trend in inflows is negative across all size categories, from small to extra-large. Specifically:

• Small inflow ratio: 49.72%
• Medium inflow ratio: 49.25%
• Large inflow ratio: 49.17%
• Extra-large inflow ratio: 48.16%

This indicates that while there is still positive inflow, it’s not enough to counterbalance outflows. Big-money players are also showing a block inflow ratio of 48.32% and a negative block trend. This suggests caution among institutional investors.

Key Technical Signals

Technically, Applovin is showing a positive bias with a technical score of 7.18 (internal diagnostic score, 0-10). The overall trend is described as "strong, cautious and optimistic."

• Shooting Star: Score 8.03 (internal diagnostic score) – a strong bullish signal indicating a potential reversal or consolidation phase.
• WR Overbought: Score 6.80 – suggests a moderate bullish bias.
• RSI Overbought: Score 6.71 – also indicating a bullish bias.

Recent indicators have been active over the past five days, with notable patterns on September 10, 12, 15, and September 11 showing WR Overbought and RSI Overbought signals. These chart patterns suggest a strong short-term bullish momentum, though the broader trend remains volatile and unclear.

Conclusion

Applovin is showing a strong technical bias with an internal diagnostic score of 7.18, driven by bullish candlestick patterns and overbought indicators. However, fundamentals remain a concern with a low internal diagnostic score of 2.91. While analysts are mostly optimistic (average rating score 4.50, weighted 5.40), the mixed money flows and weak fundamentals suggest that caution is warranted. Consider waiting for a pull-back or a confirmation of the bullish trend before making a move.