DCF Studio

    APP · NMS · Communication Services

    AppLovin Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 243.83

    Market price

    USD 228.85

    Implied upside

    +6.5%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 243.83+6.5%
    Exit multiple
    USD 375.86+64.2%
    Market price
    USD 228.85

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn7bn13bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 8.1bnUSD 10.1bnUSD 12.3bnUSD 14.7bnUSD 17.1bnUSD 19.4bnUSD 21.6bnUSD 23.3bnUSD 24.5bnUSD 25.1bn+13.5%
    EBITUSD 3.5bnUSD 4.4bnUSD 5.4bnUSD 6.4bnUSD 7.5bnUSD 8.5bnUSD 9.4bnUSD 10.2bnUSD 10.8bnUSD 11.0bn+13.5%
    NOPATUSD 3.2bnUSD 4.0bnUSD 4.9bnUSD 5.9bnUSD 6.8bnUSD 7.8bnUSD 8.6bnUSD 9.3bnUSD 9.8bnUSD 10.1bn+13.5%
    Add depreciation & amortisationUSD 1.3bnUSD 1.6bnUSD 2.0bnUSD 2.3bnUSD 2.7bnUSD 3.1bnUSD 3.4bnUSD 3.7bnUSD 3.9bnUSD 4.0bn+13.5%
    Less capital expenditureUSD -96.9mUSD -147.8mUSD -213.1mUSD -293.2mUSD -386.9mUSD -491.5mUSD -602.2mUSD -712.8mUSD -815.8mUSD -902.9m+28.1%
    Capex, % of revenue1.2%1.5%1.7%2.0%2.3%2.5%2.8%3.1%3.3%3.6%-
    Less increase in working capitalUSD -567.0mUSD -439.0mUSD -486.6mUSD -518.8mUSD -529.0mUSD -511.6mUSD -462.8mUSD -381.4mUSD -269.8mUSD -134.1m-14.8%
    Free cashflow to firmUSD 3.8bnUSD 5.0bnUSD 6.2bnUSD 7.4bnUSD 8.6bnUSD 9.9bnUSD 11.0bnUSD 11.9bnUSD 12.6bnUSD 13.0bn+14.5%
    Discount factor0.94070.83230.73650.65170.57660.51020.45150.39950.35350.3128-
    Present valueUSD 3.6bnUSD 4.2bnUSD 4.5bnUSD 4.8bnUSD 5.0bnUSD 5.0bnUSD 5.0bnUSD 4.8bnUSD 4.5bnUSD 4.1bn-
    Present Value Of The ForecastUSD 45.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta2.004Reported 2.498, pulled toward 1.0 (Blume)
    Cost of equity13.37%Risk-free + beta x equity risk premium
    Cost of debt5.83%Interest expense / average total debt
    Market capitalisationUSD 76.9bn95.6% of capital
    Total debtUSD 3.5bn4.4% of capital, book value as a proxy
    Tax rate8.7%Effective, capped at statutory
    WACC13.01%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 243.83

    46% of EV

    Forecast FCFF, final year
    USD 13.0bn
    Capex at depreciation, working capital in reinvestment
    USD 13.7bn
    Less reinvestment at g/ROIC (6.6% of NOPAT)
    USD -902.9m
    Capitalised
    USD 12.8bn
    ROIC (reported)
    37.9%
    Terminal value, undiscounted
    USD 124.7bn
    Terminal value, discounted
    USD 39.0bn
    Enterprise value
    USD 84.4bn
    Less net debt
    USD 1.1bn
    Equity value
    USD 83.4bn

    Exit at 17.9x EBITDA

    Value per shareUSD 375.86

    65% of EV

    Terminal value, undiscounted
    USD 269.1bn
    Terminal value, discounted
    USD 84.2bn
    Enterprise value
    USD 129.6bn
    Less net debt
    USD 1.1bn
    Equity value
    USD 128.5bn

    Spread between methods: 43%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    11.01%296.78302.72309.46317.15325.98
    12.01%264.34268.46273.11278.36284.32
    13.01%237.72240.60243.83247.46251.55
    14.01%215.53217.53219.78222.30225.13
    15.01%196.76198.14199.70201.44203.40

    Outlined: this model. Green text: above today's price of 228.85. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year24.8%16.5%15.6%
    EBIT margin75.8%43.8%40.3%
    Discount rate-13.0%13.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.