Are You Overpaying For AppLovin Stock Versus Its Rivals?

Over the past year, AppLovin (APP) stock has lost more than half its value. The shares now trade at 20.0 times earnings. That valuation sits below Meta Platforms and Magnite, two of the three competitors in its peer group. Yet the company leads all four businesses on both revenue growth and operating margin. So what do you get for your money at AppLovin, set against its rivals?

AppLovin Costs Less Than Magnite And Grows Far Faster

Investors pay a slightly lower price for AppLovin than for Magnite, the advertising company priced closest to it, but receive about seven times the revenue growth. Magnite trades at 20.5 times earnings, compared with 20.0 for AppLovin. Over their latest four fiscal quarters, AppLovin generated 60.6% revenue growth, well ahead of the 8.3% reported by Magnite. AppLovin also retained 77.4% of its revenue as operating profit, while Magnite kept 15.6%.

The Trade Desk is the only cheaper stock in the group. It trades at 15.1 times earnings and posted 11.6% revenue growth. Based on these figures, investors are not overpaying for AppLovin. The stock carries a lower multiple than two of its three rivals, yet it delivers the fastest growth and the widest margin of the four.

How AppLovin Makes Its Money From Advertising

AppLovin generates its revenue by placing ads. The company reported $1.92 billion in fiscal Q2 2026 revenue, which management credited to its core gaming business and a push into what it calls the consumer vertical, a segment comprising advertisers outside gaming. Executives identified improvements to the company’s core models as the primary driver of near-term growth. They noted that for each extra dollar of revenue, about $0.10 goes toward the computing power used to train those models.

The company remains in the early stages with those newer advertisers. During fiscal Q2 2026, AppLovin opened its Ads Manager platform to the public. Management said the company is signing mid-market advertisers first, where the platform performs best today. Executives also acknowledged that AppLovin is not yet well known among e-commerce businesses that do not use the service. The growth at AppLovin therefore comes from improved ad models, which the company initially sold in gaming and is now marketing to a wider set of advertisers.

Is AppLovin’s Growth Slowing Down?

Yes. AppLovin has reported lower year-over-year revenue growth in each quarter than in the one before. Revenue grew 68.2% in fiscal Q3 2025 and 65.9% in fiscal Q4 2025. That pace slowed to 59.0% in fiscal Q1 2026, followed by 52.8% in fiscal Q2 2026.

Management expects growth to slow further. The company guided for revenue growth of 46% to 48% in fiscal Q3 2026, a period AppLovin is expected to report on or around November 4, 2026. Executives stated that the next step-up in their models landed just after fiscal Q2 2026 ended. They also cautioned that there is no guarantee of gains in every three-month period.

The lower share price appears to assume this slowdown will continue. Investors need AppLovin to maintain its lead over rivals in growth and margin while that happens, a standard it has met so far. Revenue growth in the upcoming fiscal Q3 2026 report will be the measure to watch.

Does This Mean You Should Act On APP?

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