APP Down 14% In A Day. How Confident Are You In The Stock?
AppLovin (APP) stock is down 14.0% in a day. The stock looks attractive, but the history suggests it has a hard time recovering within a year following large dips. Consider the following data:
- Size: A $199 Bil company with $5.3 Bil in revenue currently trading at $587.00.
- Fundamentals: Last 12 month revenue growth of 48.2% and operating margin of 55.6%.
- Liquidity: Has Debt to Equity ratio of 0.02 and Cash to Assets ratio of 0.2
- Valuation: Currently trading at P/E multiple of 81.8 and P/EBIT multiple of 72.0
- Has returned (median) -44.4% within a year following sharp dips since 2010. See APP Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for APP, see Buy or Sell APP Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and APP drops another 20-30% to $411 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
APP stock has fallen meaningfully recently and we currently find it attractive but volatile. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Trefis works with Empirical Asset Management – a Boston area wealth manager – whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
Below are the details, but before that, as a quick background: APP provides a software platform for mobile app developers to improve app marketing and monetization, featuring AppDiscovery, which matches advertiser demand with publisher supply through auctions.
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2022 Inflation Shock
- APP stock fell 91.9% from a high of $114.85 on 11 November 2021 to $9.30 on 27 December 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 16 September 2024
- Since then, the stock increased to a high of $718.54 on 30 September 2025 , and currently trades at $587.00
| APP | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -91.9% | -25.4% |
| Time to Full Recovery | 629 days | 464 days |
Worried that APP could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.