What they do is help application developers. First, they make it easier for applications to be discovered in stores on mobile phones, namely the App Store or Google's store, they have services in this direction. Second, they ensure that applications earn money, they ensure that advertisements are placed within the application. They manage a software that allows these advertisements to be displayed at the most appropriate price within applications, similar to Google's Adworks. They also use artificial intelligence quite effectively for all these jobs, and in this way, they ensure that both applications reach the right users through stores and applications meet with the right advertisers. They also have their own applications and games. That is a business line that they have not expanded much at the moment. But they find ways to make money through those applications, both with the advertisements they have placed in them and with user fees. I normally do not like jobs that are based solely on advertisements.

I like that there are more elements that add value to the customer in the business. However, Applovin is an exception in this regard. Because Applovin is actually a great product for app developers and as far as I can tell, they love it. Because when you develop an app, it is very difficult to promote it, to reach the right audience, and to earn money from this app. Especially if you are pursuing a model of earning money through advertising through the app, your product must be introduced correctly to advertisers and advertisers must see that they can reach their own customers through your app. In this sense, Applovin offers the right services. This is Applovin's business model.

Its financials are also very strong. This has a very positive impact on the value of the stock. When we look at the last investor letter, I see that its turnover is 1.08 billion. This is the second quarter turnover and there is a 44% increase year-on-year here. Net profit is 310 million dollars. Yes, this company is profitable, it is not a company that does not make a profit. Its net profit margin is around 29%. I am talking about a quarter again, well above last year's 80 million dollars. Last year, the quarterly profit margin was 11% net. It has two main businesses. The first is the platform that I mentioned earlier, which provides services to other applications, they call it a software platform. The turnover increase here is 75% year-on-year, 711 million dollars, and the turnover came from here. The adjusted EBITDA of this segment increased by 91%, to 520 million dollars, and it achieved 73% Adjusted EBITDA.

Their second important product is their own applications. As I mentioned earlier, the growth here is slower, around 7%. As far as I understand, instead of competing directly with application developers, they are now thinking of keeping this business to a certain extent and growing the software platform. There is a turnover of 369 million dollars from here. The adjusted EBITDA of the segment increased by 33%, to 81 million dollars, and they achieved a profit margin of 22%. The management says they want to increase profitability on this side. They seem to be going in the right direction in that direction. When we look at Adjusted EBITDA, it has increased by 80%, the total of these two platforms has reached 601 million dollars year-on-year and there is an adjusted EBITDA of 56%.

When I look at free cash flow, they have created 455 million dollars from operations. There is 446 million dollars of free cash left at the bottom. Turnover is increasing. The basis of the turnover increase comes from the software platform. What I like is that while increasing turnover, they have also managed to increase EBITDA. At least they have stabilized it now. This is also important, it means that they do not make growth by compromising profitability. They can keep their determination at a certain level. When I look at the details of the two platforms again, the Software Platform is growing rapidly, it is very pleasing and they keep EBITDA at 73%. On the other hand, turnover is not growing much on the application side. Turnover is above last year but below the previous quarter, for example. But here, Adjusted EBITDA is growing rapidly. So they are getting rid of unprofitable products and applications and focusing on more profitable products and customers.

Also, when you look at the situation in Seeking Alpha, it seems like a strong buy quantitatively. In other words, when I look at the quantitative figures, the company looks good. Both Wall Street and Seeking Alpha analysts have given a buy, not a strong buy. The main reason for this is that its value has increased a little quickly. The value increase since the beginning of the year is 117%, and the value increase in the last year is 121%. It is one of the lists that we wish had been in my portfolio earlier. When I read the comments, most of them are quite positive. Especially this Software Platform side has a new product called AXON that combines with artificial intelligence. They think it will help the company grow rapidly. Basically, when you look at how things are going in terms of valuation, growth, profitability and momentum, the company does not distribute dividends.

When we look at the valuation, D Plus is not too bad. Price divided by earnings is 24.97, close to the sector average for the last 12 months. Price divided by earnings forward is 19.29, again not too far from the sector averages. In fact, it is a little below the sector, even a little cheap. According to GAAP standard, price divided by earnings is 36.48, the sector average is 29.70, a little above it. But when we look at the forward, do not forget that the company is growing very fast. 25.41 seems below the sector average. PEG is very good, 0.01 seems very cheap. PEG non-GAAP forward is not that cheap. But it is still below the sector average, 0.61, the sector average is 1.95. It seems well below the sector average. It got a little F in those according to book value. When we look at the forward according to cash flow, it is still positive.

So there is definitely no very bad valuation here. Also, the company is growing very fast. When we consider that, these numbers may become even more positive in the future. Remember that the turnover growth I mentioned earlier is 44% of the company. I don't know why it is 37% in Seeking Alpha. It is a bit different from the company's own report. They may be looking at different criteria, but it is very high in any case. Because the sector average is 3.45%, the turnover growth is expected to be 2.81% forward, which is still amazing. EBITDA growth is very impressive, 121% year-on-year, EBITDA Growth forward is 37.83%, all of them are way above the sector. In other words, especially EBITDA growth year-on-year is 12810% above the sector. Earnings per share growth is 4267%, the sector average is 2.99%, which is a bit of an exaggeration, it is 142000% here. EPS growth expectation for the next 3-5 years is 31.75%, the sector average is 14.61%, way above. Levered Free Cash Flow, or free cash flow divided by sales, let me put it this way, is 63.84%, way above the sector average. All the numbers here are really positive.

If you look at profitability, when I look at Profitability, Gross Profit (gross profit) is 71.8%, well above the sector average of 49.8%. EBIT is 30.02%, again well above the sector. When I look at EBITDA for the last 12 months, it is 41.7%, well above the sector average. Net profit margin is 20.91%, the sector average is 3.65%. When I look at free cash flow margin, it is 30.47%, meaning 30.47% of sales remain as free cash flow for the company, well above the sector average of 10.57. You can look at the others yourself. Here again, it is 10 out of 10.

When you look at momentum, its momentum is A Plus, meaning the movement of the stock is strong. 119% in the last 9 months, 124% in the last 1 year, 43.34% in the last 6 months, 4.03% in the last 3 months. It has slowed down a bit in the last 3 months. This is probably the result of previous increases. The company also has such a strong momentum. When we look at the option pricing, there are many call options in the 84 - 86 region up to 87. These are in the money, that is, options that are already close to the company's price right now. Then there are many options at the 90 level, 90 - 91. Then the 95 region is intense, then 105. My guess is that they will try to get this stock to 100. The stock's current price is around $86.58. I like looking at stocks from different dimensions in a few applications.

In this context, I also use Finchat.io. I like it because some financial tables here really approach completely different details. The last quarter turnover is 1 billion 80 million, there is a 44% growth compared to the previous year. Growth rates were 47.9% in March and 35.7% in December 2023, in other words, the company has accelerated very quickly recently. It has achieved tremendous growth right now. This artificial intelligence side is probably very important here. I like that too. Because it is one of the places where artificial intelligence will get the best results. Bringing the right customer together with the right app, the right customer with the right ad, and giving the right ad price. So I think artificial intelligence will be very useful here in the shortest period, we also know this from Meta. I see these results here.

There is a gross profit of 797 million dollars. Total profit growth compared to last year was 62%, the quarter before that was 68%, the quarter before that was 104%, the quarter before that was 45%. When you go back from 2023, there is a mediocre period until 2021. But don't let 2020 fool you, that is the period when Covid was intense. People are using a lot of applications at home. The company then entered a certain stagnant area, especially after interest rates increased. But now it has become good again. While the company is growing its gross profit by leaps and bounds, general expenses have not increased much. Only 8.9% research and development expenses grew by 19.3%, other operating expenses by 12.9%. In other words, they increased their main operating profit by 197%. The only thing I don't like about the company is that it is a company in debt, it has debts of around 3.5-4 billion dollars. Therefore, it has a considerable interest expense of 74 million dollars. In other words, of course, it may not be a big problem when compared to the growth in the main operating decision. But the total borrowing expenses are 46.4% higher than last year.

Its balance sheet is not the strongest so far. Cash flow and profitability are great but I think the balance sheet is a bit indebted. Profit from all operations is $310 million, 285.7% higher than last year, net profit is $310 million, 285.7% higher than last year. Another aspect that I like is that the company seems to be reducing its stock or keeping it at the same level. While there were 366 million shares in the same period last year, it has now decreased to 348 or billion, I don't know the exact number now. This is also positive because this is no longer a startup, it is a profitable company. It gives people normal good salaries, bonuses, they don't have to give stock options. I liked this aspect too and when we look at it, the earnings per share increased by 311%, diluted earnings per share increased by 307% compared to last year. In other words, they would really get mad at anyone who said something about these balance sheets. In other words, it is really strong.

When I look at the balance sheet, the debt issue that I mentioned earlier comes to the fore. They have around 460 million dollars in cash and cash has decreased compared to last year. Receivables are 1 billion 74 million. It has increased by 60% compared to last year. There seems to be a bit of a problem with cash flow cycles here. Their sales are growing very fast but they are not turning into cash at that speed. Therefore, receivables are growing fast and cash is decreasing. I found this side of the company a bit weak. Total current assets are 1 billion 660 million, when we add all assets, the company has 5 billion 269 million assets when we include long-term.

Let's also look at the liabilities side. Of course, what's there. First of all, as accounts payable has grown fast, there is a 48.6% growth in commercial debts to others. There is a 10% increase in long-term debts here. I have seen much better balance sheets than this in asset-liability comparisons. They have managed to obtain 454 million dollars of free cash flow from a strong 310 million dollars of net profit. When I look at where the difference comes from, they have written depreciation here, especially close to 100 million dollars. When you add various intangible assets, of course, the number suddenly grows. Free cash flow is strong and there is a 97.8% increase compared to last year. This is good, in other words, the company is in debt but can make money, generate cash. I think it can pay these debts with this cash.

The company is also buying back stocks. It has quite intense buybacks. This is also positive in terms of stocks. Less stock means greater value. The company's value is 28 billion 683 million and the increase continues rapidly here. In other words, it reached up to 35 billion dollars in 2021. Here, during those exciting times of Covid, when money was abundant. Right now, when money is scarce and interest rates are high, it has reached valuations close to that. It is also useful to appreciate this. The only negative area is that its debt is a little too high. Let's also look at Investing Pro. What do they think about the stock there? The thoughts there are also positive. The current price is $86.58 fair value, which means the value this company should be is 96.68, there is an upside of 11.7%. So it seems like we have a little way to go up. I like this, to be honest, and when they evaluated the company in terms of health, it came to 4 out of 5. It is a successful, fast-growing company.

Cash Flow Free Cash Flow Health gave 3. Here is this interest payment related to debt etc. They gave 4. Profitability 4 out of 5, growth 4 out of 5, relative value, i.e. comparison to similar companies, gave 2. It seemed a little unfair to me. Because we saw it in the analysis of different competitors on Seeking Alpha a while ago, if you remember, it was cheap compared to competitors in most places. The news side is a little annoying, they sell shares. Vivas Eduardo director sold shares, Chief Marketing Officer sold shares, CFO sold shares. I don't make a big deal about these, but there is no such intense share purchase inside. Of course, when there is a purchase, people feel better. It may not be a very critical issue. Investing Pro can make valuations according to different models. For example, there are different criteria for free cash flow, growth, output. You can enter and learn all of them. DCF Growth Exit is one of the most used ones. When we look at it, the current price is $86, the fair value is $117.

There are 10 analyses on Tipranks.com. $99.86 shows a potential of 15.34% upwards. When we look at top analysts, that is, higher quality analysts, they also give a price of $101.33 upwards. There are 5 buys in top analysts, when we look at all analysts, there are 8 buys and 2 holds. We have a company with very strong financials. Cash flow excluding debt is growing rapidly, turnover is growing rapidly, gross profit is growing rapidly. On the other hand, net profit is also growing rapidly. Operating expenses are not growing that rapidly. Artificial intelligence is used effectively. I think it is a very successful company. It looks like a company that can be included in portfolios. On the other hand, it is not a company that will enter my main portfolio. Because I do not think it is a technology that will change the world.

Of course, it is clear that it adds great value to application developers. It is clear that it uses artificial intelligence very well, but I like things that are a little more ambitious. This does not mean that Applovin cannot be invested in. On the contrary, what you see is that there is an upward trend in both tipranks, investing pro's model, and even in the quantum of seeking alpha. I think the stock may go up a little more in the next balance sheet. Of course, if things do not get too messy in the stock markets, it is a cyclical business, meaning if the economy is lively, Applovin will grow faster. While I was wondering if there are any problems with the American economy shrinking in the last 6 months, Applovin continued to grow, I appreciated that. Technology is used effectively in this respect, but it is still a cyclical business. In other words, when the economy slows down, no one cares that much about applications, you know.

When we look at the upcoming period, if you believe like me that money will be abundant, if you believe that the FED will soften a little more, these will benefit Applovin in every way. First of all, it has debt. This is a company that does not have a lot of cash, such as the interest it will pay the debt will decrease. So we can't say it's not worth investing in. In fact, it seems like a very strong company that people would enjoy having in their portfolio. But it's not my main field. So I'm not thinking of a long-term investment. Instead, I'll do something simpler. I believe this. If Wall Street analysts predict a price like 99.86 or 100, they somehow move the stock up there. I think there's a possibility that they'll buy the stock in the balance sheets of the next two quarters, and in this context, I'll join the Applovin process with a call option.

But I really liked the company's financial picture and its future, and I saw it as bright. Just as I mentioned, it's not a company that will have a very strong place in my main investment strategy. I can always be wrong about the stock price, and this is also a fact. When we look at it from a technical perspective, the stock is currently above all averages and the Macd is pointing upwards. The RSI is not in a very bad place, but the stock is at prices close to its peak. In other words, it's seen higher highs, but it's not too far from there either. Always keep this in mind. If you're going to buy, if you're thinking of building a spot position, it's useful to enter step by step. Frankly, I don't plan on making any transactions this week. And as you know, we are waiting for Powell's speech on Friday. But from now on, there is definitely room for Applovin in my options trades.

The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.

The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.