I may have discovered an opportunity and it is in the software space. The company is Applovin, I know right, what a weird and funny name. Let's get passed the name and see what they do. Applovin has solutions to get more downloads and revenue for app developers especially in gaming. It is an advertising saas for mobile apps and gaming apps. They have had some drama with Unity and Ironsource last year. But I believe that is passed us.
Some key metrics that I track in their earnings is that these guys are profitable! They have a slowing growth rate however being able to be profitable while slowing growth is something special; I think. They trade around 1.4x revenues so meaning market cap is around 4B with 2.8B in revenue. Making the stock price under $11 is a pretty good deal.
Does anyone here have more insight into the ad spend space? Like does google and meta affect this? Or is this stock more related to gaming and follows that cycle?
Some tailwinds that this stock has for it is that even though mobile downloads are down, the spending on apps are going up. They are also cash flow positive with an authorized 400M buy back. Once all these good things come together, you'll see this stock rise safely back to $20+.
Leave a Reply