AppLovin Corp. (NASDAQ:APP)

Price to Earnings (P/E) Ratio

The P/E ratio exhibits significant volatility over the observed periods, with an initial absence of reported values until March 31, 2022, when it registers an exceptionally high figure of 472.35. Subsequent quarters see fluctuations including a peak at 508.94 followed by a gradual decline to 27.16 by December 31, 2024. However, starting in March 31, 2025, the ratio increases again, reaching values above 50 in the later quarters. This pattern indicates periods of high market expectations relative to earnings, followed by corrections and increased market skepticism or changes in earnings expectations.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio is first available in March 31, 2022, and starts at an extremely elevated level of 111.61, peaking sharply at 1412.13 in June 30, 2022, suggesting very low or volatile operating profits relative to market capitalization. This ratio then decreases dramatically over time, reaching more moderate and stable levels around 18.93-44.93 in 2024 and 2025. This trend indicates improvement in operating profitability or a correction in price expectations, suggesting that operating profit became more aligned with market valuation in the later periods.

Price to Sales (P/S) Ratio

The P/S ratio initially declines from 5.99 to 1.8 between March 31, 2022, and December 31, 2022, reflecting a potential increase in sales relative to market capitalization or a falling price. Following this low, the ratio rises steadily over the subsequent quarters, reaching very high levels of above 20 by the end of the observed period in 2025, peaking at 26.48. This upward trajectory suggests market valuations growing disproportionately compared to sales, which could imply expectations of future growth or decreasing sales momentum relative to price increase.

Price to Book Value (P/BV) Ratio

The P/BV ratio shows considerable oscillation and an overall increasing trend over the time frame. Starting at 10.52 in June 30, 2021, the ratio falls to a low of 2.67 by December 31, 2022, indicating a period of higher book value relative to price. From there, the ratio climbs sharply to 178.46 by June 30, 2025, with intermittent peaks such as 60.29 in March 31, 2024. This ascent indicates significant increases in market price relative to the book value, suggesting strong market optimism or possibly dwindling tangible asset values relative to market capitalization.

The analysis of the financial data over the periods reveals several notable trends and changes in key financial metrics.

Share Price Trends

The share price exhibited significant volatility throughout the observed timeline. Initially, there was a marked increase from approximately $57.26 in March 2021 to a peak of $112.36 by September 2021, followed by a pronounced decline to $13.5 by December 2022. After this low point, the share price demonstrated a strong recovery, increasing steadily to reach an impressive level of $390.57 by June 2025. This substantial appreciation indicates renewed investor confidence and potential improved market perceptions in the later periods.

Earnings Per Share (EPS)

Earnings per share data started to record positive values beginning in the first quarter of 2022, albeit with initial volatility, including negative values such as -0.18 and -0.51 in subsequent quarters, reflecting possible operational challenges or one-time expenses. From the third quarter of 2023 onwards, EPS showed a consistent and robust upward trend, climbing from 0.06 to 7.18 by June 2025. This progression suggests improving profitability and greater efficiency in the company's operations over time.

Price-to-Earnings (P/E) Ratio

The P/E ratio, available for select periods, displayed exceptionally high values at certain points such as 472.35 and 508.94 during 2021 and 2023. Such elevated figures typically indicate that the share price is high relative to earnings, often a result of low or negative earnings in those periods. As EPS turned positive and increased, the P/E ratio decreased significantly, reaching as low as approximately 27.16 in late 2024, before slightly rising again. This decline corresponds with the company's improving earnings, reflecting a more balanced market valuation relative to earnings.

In summary, the company experienced initial volatility in both share price and earnings, with a period of adjustment and operational challenges reflected in negative EPS and high valuations. Over time, improved earnings performance and market reception led to a substantial increase in the share price and a normalization of valuation multiples, highlighting strengthened financial health and investor sentiment.

Share Price Trend

The share price exhibited significant volatility over the analyzed periods. Initially, it was relatively stable with a slight decrease from $57.26 to $56.46 between the first and second quarters of 2021. This was followed by a sharp increase to $112.36 by the third quarter of 2021, then a notable decline reaching a low of $13.50 by the end of 2022. From early 2023 onwards, the share price demonstrated a strong recovery and rapid growth, surging from $17.81 to $390.57 by the second quarter of 2025. This represents a substantial appreciation in share value within a two-year span, indicating renewed investor confidence or improved market conditions.

Operating Profit Per Share (OPPS)

Operating profit per share data started from the first quarter of 2022, initially at $0.40, followed by a steep decrease to $0.03 in the second quarter of 2022 and a modest recovery to $0.09 by the end of that year. Early 2023 saw a slight dip into negative territory (-$0.13), but this was short-lived. From mid-2023 onwards, there was a consistent and marked upward trend in operating profit per share, reaching $8.69 by the second quarter of 2025. This steady increase suggests improving operational efficiency and profitability over time.

Price to Operating Profit Ratio (P/OP)

The price to operating profit ratio showed extreme fluctuations early in the observation period. The ratio was exceedingly high in several quarters of 2022, peaking at 1,412.13 in the second quarter, which likely resulted from the combination of a depressed share price and very low operating profit per share. Subsequently, the ratio declined steadily, reaching single digits in 2023 and early 2024 before experiencing some volatility again toward the end of the period analyzed. By the second quarter of 2025, the ratio was around 44.93, suggesting that the share price was moderately valued relative to operating profits compared to earlier periods.

Overall Financial Performance Insight

The company exhibited a period of financial and market instability around 2021 and 2022, characterized by dramatic oscillations in share price and operating profitability. However, from late 2022 onward, there was a clear trajectory of recovery and growth in both share value and operating profits per share, indicating enhanced operational performance and positive market sentiment. Although the P/OP ratio exhibited high volatility early on, more recent periods reflect a stabilization, suggesting market valuations better aligned with profitability metrics.

Share Price Trend

The share price of the company exhibits considerable volatility over the analyzed periods. Initially, the share price was around $57, experiencing fluctuations with a peak near $112 at the end of the third quarter of 2021. This was followed by a significant decline to approximately $13.5 by the end of 2022. From early 2023 onward, the share price showed a robust upward trajectory, culminating in a substantial increase to over $390 by mid-2025.

Sales Per Share Trend

Sales per share data commences from the first quarter of 2022, showing consistent growth over time. Starting at approximately $7.43, sales per share gradually increased each quarter, reaching a value of about $14.75 by mid-2025. This steady increase indicates improving sales performance on a per-share basis during the period.

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

The price-to-sales ratio demonstrates marked variability. Initially high around 5.99 at the beginning of 2022, the ratio decreased steadily to a low of roughly 1.8 by early 2023. Subsequently, the P/S ratio surged, surpassing previous highs and peaking at 26.48 by mid-2025. This pattern suggests that the market valuation relative to sales fluctuated considerably, with a notable expansion in valuation multiples in the latter periods.

Summary of Insights

While sales per share consistently improved, indicating strengthening operational performance, the share price and resulting valuation multiples were more volatile. Early periods were characterized by a declining share price and P/S ratio, possibly reflecting market concerns or external pressures. From 2023 onward, a pronounced recovery and expansion in share price occurred, outpacing the growth in sales per share and causing a sharp rise in the price-to-sales ratio. This implies increased investor confidence and a willingness to pay a premium for each dollar of sales, potentially driven by expectations of future growth or other favorable company developments.

Share Price

The share price exhibited considerable volatility over the observed period. Initial values were moderately high around $57.26 to $112.36, followed by a steep decline from December 2021 through December 2022, bottoming out near $13.5. From early 2023 onward, the share price showed a strong upward trajectory, with particularly sharp increases in late 2024 and early 2025, peaking at $390.57 by June 2025. This suggests a renewed investor confidence or positive market developments toward the latter periods.

Book Value per Share (BVPS)

The BVPS started at a negative value but quickly rose to just above 5 in the earlier quarters of 2021, maintaining stability around this level until mid-2023. From mid-2023, the BVPS gradually declined to a low of approximately 1.7 by March 2025. This downward trend in book value per share during the same timeframe when share price surged is indicative of either increased leverage, asset write-downs, or other accounting effects diminishing book equity.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio demonstrated high variability reflective of the dynamics in share price and BVPS. Initial data points show elevated P/BV ratios, especially in mid to late 2021, reaching over 20. The ratio decreased significantly through 2022, aligning with the decline in share price and relative stability in BVPS. From 2023 onward, the P/BV ratio began increasing dramatically, particularly from early 2024, reaching extraordinarily high values nearing 178 by early 2025. This indicates that market valuation far outpaced the book value of equity, potentially signaling market optimism, speculative valuation, or growth expectations not yet reflected in book equity.

Overall Observations

Over the periods analyzed, the share price showed a marked U-shaped pattern with a steep dip and subsequent rapid appreciation. In contrast, the book value per share experienced a general downward trend starting mid-2023. The P/BV ratio amplified these contrasts, with extreme highs reflecting significant divergence between market valuation and book value. Such trends may suggest market anticipation of future growth, intangible asset recognition, or other market dynamics beyond the scope of book fundamentals.