Latest news with #TripledotStudios
Yahoo
a day ago
- Business
- Yahoo
Morgan Stanley Argues That Shedding 1P Games Could Enhance AppLovin's (APP) Market Value
AppLovin Corporation (NASDAQ:APP) is one of the best stocks to buy. On June 9, Morgan Stanley reiterated an Overweight rating on APP and lifted the price target to $460 from $420, noting that the company would be "more valuable without its 1P games." The analysts were bullish on AppLovin's initiative to sell its Apps segment, suggesting the move would create shareholder value while keeping future earnings steady. As reported in February, the company plans to shed its first-party mobile games division, called the Apps Segment, in the second quarter of 2025 to Tripledot Studios for $400 million in cash and $400 million in Tripledot stock. Morgan Stanley is bullish on this divestiture, even though the Apps segment generated 32% of AppLovin's revenue and 10% of EBITDA in 2024. The analysts commented that the sale would allow the company to achieve "high-margin revenue that the 1P studios spend on APP's ad network, offsetting most of the lost earnings from 1P games." A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform. The tactical shift will redistribute profits "from the low multiple games business to the high multiple ad business, increasing the total value of the company." Morgan Stanley has revised its 2026 and 2027 EBITDA projections for AppLovin downward by 1%. However, the analysts are using a larger EBITDA multiple of 29x, up from the prior 26x. This update suggests a shift from the prior sum-of-the-parts valuation model, which placed a conservative 4x multiple on the Apps' EBITDA. AppLovin Corporation (NASDAQ:APP) builds software tools that help advertisers and app developers grow and monetize their content across mobile and connected TV platforms. While we acknowledge the potential of APP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None.
Yahoo
09-06-2025
- Business
- Yahoo
Is AppLovin a Buy Today?
AppLovin stock is up nearly 400% over the past year. Management has openly expressed interest in acquiring TikTok. The company was the target of a recent short report. 10 stocks we like better than AppLovin › AppLovin (NASDAQ: APP) stock has had a roller-coaster 2025, reaching an all-time high before being cut in half after it came under scrutiny in a short-seller report. Since then, the stock has recovered most of those losses after the advertising tech company posted blowout earnings and made a bold move to publicly bid on acquiring TikTok. Let's examine the recent news and determine whether the stock is overhyped or if its lofty valuation is justified. AppLovin recently reported its results for the first quarter of 2025, and the company did not disappoint. Total revenue rose 40% year over year to $1.48 billion, driven by its advertising segment, which matches advertisers and app publishers via auctions at a large scale and microsecond speeds. The mobile tech company has accelerated its revenue by shifting its primary focus from gaming advertising to the broader global advertising economy, which opens up an opportunity for 10 million advertisers globally, according to management. During the first quarter, the company's advertising revenue increased to $1.16 billion, representing a 71% year-over-year rise. Meanwhile, AppLovin generated $826 million in free cash flow, a key profitability metric, representing a 114% year-over-year increase. With its positive free cash flow, management has elected to repurchase its stock aggressively rather than pay down its $3.2 billion in net debt. Specifically, the company spent $1.2 billion in the first quarter, nearly $400 more than the company generated in free cash flow. Over the past three years, management has reduced its share count by 9.3%, which not only increases existing shareholders' ownership stake, but also suggests management is bullish on the company's long-term prospects. In other developments, AppLovin sold its declining mobile gaming division to Tripledot Studios for $400 million in cash, along with an estimated 20% equity stake. The deal is expected to close as early as Q2 2025, further signaling management's confidence in its strategic pivot to advertising. The most headline-grabbing move of 2025, however, wasn't AppLovin's earnings report or the sale of its gaming division; it was when the company disclosed that it is prepared to make a serious offer to acquire TikTok's global operations, should regulatory pressure force a divestiture. The bid would allow Chinese investors to retain a stake in TikTok, while AppLovin would manage its global operations. In CEO Adam Foroughi's words, AppLovin can offer a "much stronger bid than others" thanks to its technical infrastructure, monetization expertise, and real-time ad marketplace. The price tag would likely be costly for the social media platform, with a reported 1.6 billion global users generating an estimated $23 billion in revenue in 2024. It could also be a lengthy and politically fraught acquisition process. Still, the possible move is exciting for investors to dream about and could spur the next phase of growth for AppLovin, which had a recent market capitalization of $140 billion. Of course, fast-growing tech companies often attract critics, and AppLovin is no exception. Recent short reports, including one from the investigative investment company Muddy Waters Research, accused AppLovin of violating the terms of service of key platform partners, resulting in an observed 23% client churn rate in the first quarter of 2025. In an open-letter rebuttal, Foroughi addressed the claims head-on, arguing that "a few nefarious short-sellers are making false and misleading claims aimed at undermining our success." Furthermore, Foroughi called the report "littered with inaccuracies and false assertions," and emphasized that the company operates in full compliance with App Store policies, stressing that "there has been no churn" among its advertising clients. For investors, it's important to understand that companies publishing short reports typically hold short positions in the companies they investigate. This means they are financially incentivized to release negative research -- whether or not it's fully substantiated. Notably, AppLovin's stock dropped nearly $66 to $261.70 per share after the report was published in March, but has since recovered and then some to over $414 per share as of this writing. Before buying any stock, it's essential to consider its valuation -- especially with high-growth tech companies, which often trade at premium levels due to their long-term potential. AppLovin is no exception, currently trading at 56.6 times its trailing-12-month free cash flow of $2.5 billion. However, that premium appears more reasonable given that free cash flow has grown nearly 80% year over year. The stock is also trading about 33% below its peak price-to-free-cash-flow multiple, suggesting a slight discount for new investors. For growth investors who think long-term and believe in the power of scalable software and monetization, AppLovin remains a buy, regardless of whether or not TikTok is involved. Before you buy stock in AppLovin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AppLovin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Collin Brantmeyer has positions in AppLovin. The Motley Fool has positions in and recommends AppLovin. The Motley Fool has a disclosure policy. Is AppLovin a Buy Today? was originally published by The Motley Fool Sign in to access your portfolio
AU Financial Review
30-05-2025
- Business
- AU Financial Review
Melbourne entrepreneur builds $3b gaming empire out of solitaire app
Melbourne entrepreneur Eyal Chameides traces the roots of his mobile gaming empire back to a simple theory: if he could build a game of solitaire that outshone the thousands of versions that already existed, then he could find enough users to attract a rush of advertising dollars. Chameides and his two co-founders not only proved the theory, they smashed it out of the park. Their business, Tripledot Studios, which started up in 2017, is already worth about $US2 billion ($3.1 billion)
Globe and Mail
15-05-2025
- Business
- Globe and Mail
AppLovin Stock Plunges 26% in 3 Months: Is it a Smart Investment Now?
AppLovin Corporation APP has witnessed its stock decline 26% over the past three months, worse than the industry 's 15% decline. Notably, competitors in the in-game mobile advertising space have also faced headwinds. Alphabet GOOGL shares have dropped 11%, while Meta Platforms META has seen a 10% decrease during the same period, reflecting broader weakness in the digital ad ecosystem. However, the tide appears to be turning. APP has surged 64% in the past month, signaling a strong rebound. Alphabet has also shown signs of recovery with an 8% gain, while Meta Platforms has rallied 31% during the same timeframe. As major players like Alphabet and Meta Platforms regain momentum, their performance may signal improving market conditions for digital ad companies. This analysis will explore whether APP now presents an attractive opportunity for investors. APP's Strategic Shift Toward a High-Margin Business Model AppLovin is actively transforming into a pure-play advertising platform, sharpening its focus on high-growth, high-margin segments. A major milestone in this transition was the $900 million sale of its gaming unit to Tripledot Studios. This divestiture allows APP to concentrate on its ad technology, a move that aligns with its vision of serving the global digital advertising market, which includes over 10 million businesses. To capitalize on this vast market, the company is investing in automation, developing advanced tools to enhance customer efficiency and maximize ad performance. Strong Financial Performance Underscores Growth Potential AppLovin's latest earnings report reinforces its strong financial health and growth trajectory. The company continues to benefit from its AXON 2.0 technology and strategic expansion within the gaming and in-app advertising sectors. In the first quarter of 2025, revenues surged 40% year over year, reflecting strong market demand. Adjusted EBITDA jumped 83% year over year, showcasing improved operational efficiency. Net income skyrocketed 144% from the prior year, demonstrating APP's ability to translate revenue growth into significant profitability. For the full year 2024, revenues climbed 43% year over year, while adjusted EBITDA surged 81%, underscoring AppLovin's ability to seize market opportunities while maintaining efficiency. Analysts Project APP's Robust Earnings and Revenue Expansion The Zacks Consensus Estimate for second-quarter 2025 earnings is $2.01 per share, indicating an impressive 125.8% increase from the prior-year quarter. Moreover, earnings for the full years 2025 and 2026 are expected to grow by 85.2% and 41.9%, respectively, compared to the previous years. The Zacks Consensus Estimate for second-quarter 2025 revenues is $1.45 billion, representing an impressive 33.9% increase from the prior-year quarter. Moreover, earnings for the full years 2025 and 2026 are expected to grow by 24.3% and 19.7%, respectively, compared to the previous years. APP is a Buy APP presents a compelling investment opportunity due to its impressive financial performance and robust growth prospects. The company's recent results and strategic initiatives underscore its potential for continued success in the gaming and software sectors. AppLovin's strong fundamentals, innovative technology and strategic growth initiatives position it as a leader in its industry. With a solid financial outlook and increasing analyst confidence, we recommend a "Buy" rating for APP stock to capitalize on its promising growth trajectory. APP currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AppLovin Corporation (APP): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report
Yahoo
09-05-2025
- Business
- Yahoo
Tripledot CEO Calls Deal to Buy Applovin 'Transformational'
Mobile game developer Tripledot Studios has bought AppLovin's games portfolio for about $800 million. The deal means London-based Tripledot - the company behind popular games including Woodoku and Solitaire - will take control of another 10 studios across key markets in the US and Asia. Co-founder and CEO of Tripledot Studios, Lior Shiff spoke to Bloomberg's Tom Mackenize on "Daybreak Europe." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
