Does The Fall In AppLovin Stock Change Anything? Trefis Team Wed, October 7, 2026 at 4:34 PM EDT 3 min read APP +0.90% ^GSPC -0.22% U +1.09% TTD +1.43% META -2.38% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Shares of AppLovin (APP) fell 57% between January 9 and October 6, 2026, a period when the S&P 500 returned 13.2%. During that stretch, the company delivered fourth-quarter results in February that beat estimates, followed by second-quarter results on August 5 that fell just short of its own forecast. So what changed at AppLovin between those two reports?
Each Quarter, AppLovin Grew More Slowly
AppLovin's sales kept growing between those earnings releases, but the pace of that growth steadily decelerated. Sales rose 65.9% from a year earlier in the fourth quarter of 2025. That expansion then slowed to 59.0% in the first quarter of 2026 and to 52.8% in the second.
The stock dropped even when the company delivered strong numbers. Shares fell 16% in early trading on February 12, 2026, the morning after AppLovin beat analyst estimates for the fourth quarter and raised its outlook for 2026.
The August 5 report then fell short on adjusted EBITDA. Second-quarter revenue of $1.92 billion landed just below the midpoint of AppLovin's guidance, while adjusted EBITDA, the profit measure the company uses for its forecasts, came in just below its target range. During the August 5 call, executives explained that the quarter came down to timing. Improvements to the company models, whose performance executives called the single biggest driver of gaming growth, rolled out more slowly than usual. The next improvement arrived just after the quarter ended.
AppLovin guided for third-quarter revenue growth of 46% to 48% from a year earlier, stepping down from the 52.8% seen in the second quarter. That third quarter has ended, with results still pending. Executives noted that the guidance includes only the model improvements already live and assumes no new releases.
Looking further out, executives said on the August 5 call that they expect the business can compound at roughly 30% a year. This figure represents a forecast rather than a reported result. The company ties that 30% to two main factors. The first involves continuing to improve in gaming, a segment that executives said is still the majority of revenue. The second relies on expanding a consumer advertising business that they described as early.
AppLovin's Operating Margin Is Higher Than A Year Ago
AppLovin stock is now priced like an average company, trading at 21.2 times earnings against 21.5 for the S&P 500. Based on sales, the stock still costs 13.7 times, compared to 3.0 for the index. That premium appears to assume AppLovin keeps its margins.
The operating margin for AppLovin is higher than it was a year ago, reaching 77% over the last twelve months, up from 70%. The company also carries little net debt. Executives put that figure at about 0.1 times a year of adjusted EBITDA on the August 5 call.
Executives did note on that call that computing costs for training its models are rising. The company guided an adjusted EBITDA margin of approximately 83% for the third quarter. If the upcoming third-quarter report reveals a margin clearly below that level, it would show costs rising faster than the company planned for.
Does This Mean You Should Act On APP?
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