AppLovin Corp. (NASDAQ:APP)

Price to Earnings (P/E) Ratio

The P/E ratio data begins from the third quarter of 2023, showing a significant initial value of 508.94 which then declines markedly over the subsequent quarters. It decreases to 27.16 by the end of the first quarter of 2024, indicating an improving earnings outlook or stabilization in share price relative to earnings. However, after this low point, the ratio rises again, fluctuating between approximately 40 and 74 through to the third quarter of 2025, suggesting variability in market sentiment or earnings performance during this period.

Price to Operating Profit (P/OP) Ratio

This ratio exhibits a steep decline from extremely high values in early 2022 (1412.13 in Q1) to much lower levels below 60 starting late 2022. From mid-2023 onwards, the ratio stabilizes mostly between 18.93 and 59.84, with some volatility but overall indicating a market valuation that is less disconnected from operating profit than in earlier periods. This trend points to improving operating profitability or market adjustments reflecting better profit expectations.

Price to Sales (P/S) Ratio

The P/S ratio shows an initial downward trend from 5.3 in early 2022 to a low of 1.8 in Q4 2022. Following this, the ratio steadily climbs, reaching a peak of 40.14 in Q3 2025. This consistent increase suggests that the market is placing higher values on sales, perhaps due to growth expectations or other strategic factors, despite the earlier periods of contraction. The sharp rise in later periods may indicate optimism about revenue growth or pricing power.

Price to Book Value (P/BV) Ratio

The P/BV ratio decreases from 7.41 in Q1 2022 to a low of 2.67 by the end of 2022, reflecting either book value growth or a decrease in market capitalization. From 2023 onwards, the ratio experiences dramatic increases, peaking at 178.46 in Q2 2025 before slightly moderating. These elevated levels suggest that the market values the company substantially above its book value, indicating strong growth expectations, intangible assets, or market optimism that significantly exceeds the underlying net asset valuation.

Overall Trends and Insights

Across all presented valuation multiples, the company experienced a period of extremely high ratios early in 2022, followed by sharp declines toward the end of that year. Subsequently, from 2023 onwards, there is a clear trend of rising valuation multiples, especially noticeable in price-to-sales and price-to-book ratios, indicating increasing market optimism or improved growth forecasts. The volatility in price-to-earnings and price-to-operating profit ratios suggests fluctuating profitability or changing market perceptions of earnings quality. The data collectively reflect a transition from market skepticism or correction through 2022 to renewed confidence and higher valuation multiples through 2023 into 2025.

Share Price Trend

The share price displayed a declining trend from March 2022, starting at $39.46 and decreasing to $13.50 by December 2022. Following this trough, the share price experienced a significant and consistent upward trajectory, reaching $617.05 by September 2025. Notably, the price more than doubled between December 2024 ($320.49) and June 2025 ($390.57), and then increased substantially again to $617.05 in September 2025, indicating strong investor confidence or positive market developments during this latter period.

Earnings Per Share (EPS) Movement

EPS figures were negative from March 2022 (-$0.18) through December 2022 (-$0.51), indicating losses during the early periods. Beginning in March 2023, EPS turned positive at $0.06 and continued to rise consistently each quarter thereafter. By September 2025, EPS reached $8.38, showing substantial profitability improvements. The steady and marked increase in EPS suggests enhanced operational performance or increased earnings capability over time.

Price-to-Earnings (P/E) Ratio Dynamics

P/E ratio data is available starting June 2023, where it was extremely high at 508.94, reflecting either relatively low earnings or investor uncertainty at the initial point of positive earnings. Thereafter, the P/E ratio decreased to a range between approximately 27 and 74 in subsequent quarters, showing some volatility but stabilizing as EPS and share prices increased. The high P/E in early positive earnings quarters implies investors anticipated strong growth potential, while subsequent fluctuations may reflect market recalibration to actual earnings performance and valuation adjustments.

Overall Financial Performance and Market Perception

The data highlights a transformation from a loss-making position to robust profitability, accompanied by substantial increases in market valuation as expressed by the share price. The early negative performance was followed by steady earnings growth, which appears to have driven investor confidence and share price appreciation. The initially elevated P/E ratios suggest early optimism about future earnings potential, with moderate stabilization as performance fundamentals solidified. The pattern suggests that the company successfully navigated earlier challenges and achieved strong financial growth and market recognition over the observed period.

Share Price Trend

The share price experienced significant volatility over the analyzed periods. Initially, there was a downward trend from $39.46 at the beginning of 2022 to a low of $13.50 by the end of 2022. Following this trough, a marked recovery occurred, with the price climbing steadily from $17.81 in Q1 2023 to a substantial peak of $617.05 in Q3 2025. This sharp increase in later periods indicates strong market confidence or improved company valuation metrics.

Operating Profit Per Share (OPPS) Evolution

Operating profit per share showed a general upward trajectory throughout the series. While there was a slight dip into negative territory in Q4 2022 (-$0.13), reflecting an operational setback, the subsequent quarters demonstrated consistent growth, accelerating from $0.39 in Q1 2023 to $10.31 by Q3 2025. This persistent rise suggests improving operational efficiency and profitability on a per-share basis.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio showed a declining trend initially, dropping sharply from an extremely high 1412.13 at the start of 2022 to more moderate levels around the mid-30s and 40s by the end of 2023. However, from 2024 onwards, the ratio exhibited oscillations, rising to highs near 58.16 and 59.84 during 2024 and 2025. The early decrease indicates a market adjustment to rising operating profit values, but the later fluctuations may reflect shifting investor sentiment, market dynamics, or valuation concerns despite growing profitability.

Summary of Relationships and Insights

The data reveal a correlation between improving operating profit per share and rising share prices over the long term, indicative of enhanced fundamental performance driving market valuation. However, the high variability in the P/OP ratio in the latter periods suggests valuation multiplicity factors beyond fundamental earnings, possibly including market speculation or external influences. The initial negative operating profit episode in late 2022 may have contributed to the depressed share prices at that time, with recovery thereafter supported by improving operational results.

Share Price Trend

The share price exhibited significant volatility over the observation period. Initially, it declined from 39.46 US$ in March 2022 to a low of 13.5 US$ by December 2022. Following this bottom, a strong upward trajectory is observed, reaching 58.99 US$ by December 2023, and experiencing rapid acceleration thereafter, surging to 617.05 US$ by September 2025. This indicates an accelerating investor confidence or market valuation over the later stages of the timeline.

Sales Per Share Trend

Sales per share showed a steady but moderate growth trend throughout the entire period. Starting at 7.45 US$ in March 2022, the metric increased incrementally each quarter, reaching 15.37 US$ by September 2025. This consistent increase suggests gradual improvement in revenue generated per share without significant volatility.

Price-to-Sales (P/S) Ratio Trend

The P/S ratio followed a distinct pattern characterized by an initial decline, followed by substantial growth. Beginning at 5.3 in March 2022, it dropped to a low of 1.8 by December 2022, coinciding with the lowest share prices. Subsequently, the ratio rose markedly, peaking at 40.14 in September 2025. This escalation in the P/S ratio implies that the increase in share price substantially outpaced growth in sales per share, indicating heightened market valuation relative to sales.

Overall Analysis

The data indicates a period of initial market and sales stabilization challenges through 2022, with share price and P/S ratio both declining. From 2023 onward, the company displayed consistent growth in sales per share accompanied by a strong and accelerating increase in share price, driving a surge in the P/S ratio. The rising P/S ratio signals that the market increasingly values the company beyond its sales growth, potentially reflecting increased profitability expectations, enhanced market position, or other qualitative factors influencing investor sentiment.

The share price exhibits notable volatility over the observed quarters, initially declining from $39.46 to a low of $13.50 before beginning a strong upward trajectory that culminates at $617.05. This dramatic increase in share price, particularly evident from early 2023 onwards, suggests a significant shift in market perception or company performance, driving investor demand higher.

Book value per share (BVPS) demonstrates a generally declining trend from $5.32 at the start to a trough of $1.70, before showing sporadic recovery towards $4.36 by the end of the period. The initial decline indicates a reduction in the company's net asset value per share, which could reflect asset depreciation, increased liabilities, or other balance sheet pressures. The partial recovery later may suggest stabilization or asset base improvements.

The price-to-book value (P/BV) ratio mirrors the inverse relationship between share price and BVPS, starting at a relatively elevated level of 7.41, decreasing to a low of 2.67, and then rising markedly to 141.48. The extreme elevation of the P/BV ratio in later quarters indicates that the market price far exceeds the book value, implying high investor expectations for growth or profitability that are not yet reflected in the book value. Such a premium could be linked to intangible assets, future earnings potential, or market speculation.

Overall, the data reveal a complex financial dynamic. The sharp share price appreciation despite subdued or declining book value suggests market optimism and potential growth prospects. However, the widening gap between market valuation and book fundamentals signals a need for careful monitoring, as sustained divergence can indicate overvaluation risks.

Share Price

Initial decline followed by a strong and rapid increase, peaking at over 15 times the initial value by the end of the period.

Book Value per Share (BVPS)

General downward trend with periods of slight recovery, suggesting fluctuations in net asset value per share.

Price-to-Book Ratio (P/BV)

Decreases initially but then escalates dramatically, indicating growing market premiums relative to the company’s book value.