AppLovin boosts share buyback program by $500 million

PALO ALTO, CA – AppLovin Corp (NASDAQ:APP), a $110.41 billion market cap company specializing in computer programming and data processing services, announced today an expansion of its share repurchase program. The announcement comes amid strong financial performance, with revenue growth of 43.44% in the last twelve months according to InvestingPro data. The company’s Board of Directors has authorized an immediate availability of $500 million for the repurchase of its Class A common stock, irrespective of the previous fiscal quarter’s Free Cash Flow limitation.

This strategic move increases the current limit of the repurchase program, which will now also be augmented by the Free Cash Flow generated in the preceding fiscal quarter. With robust free cash flow of $2.09 billion in the last twelve months and a perfect Piotroski Score of 9 indicating excellent financial health, the company appears well-positioned to execute this program. The new terms allow for unused funds to be carried forward for future repurchases, with the total amount not exceeding the existing maximum of approximately $1.772 billion.

AppLovin’s repurchase plan can be executed through open market purchases or privately negotiated transactions, depending on market conditions and legal requirements. The company may also employ Rule 10b5-1 plans to manage the buybacks systematically. However, the program does not commit AppLovin to acquire a specific number of shares and can be suspended at the company’s discretion.

The decision to modify the share repurchase program underscores AppLovin’s commitment to optimizing shareholder value and reflects a confident outlook on its financial health. The company’s approach aligns with Rule 10b-18 requirements, which govern the repurchase of shares by issuers.

Investors and market watchers will be observing the impact of this expanded buyback initiative on AppLovin’s stock performance in the coming quarters. While the stock has experienced significant volatility, showing a 245.1% gain over the past six months despite a recent 22.83% weekly decline, InvestingPro analysis suggests the stock is currently trading above its Fair Value. The details of this announcement are based on a press release statement filed with the Securities and Exchange Commission today. For deeper insights into APP’s valuation and 18 additional exclusive ProTips, consider exploring the comprehensive Pro Research Report available on InvestingPro.

In other recent news, AppLovin has been the focus of multiple analyst reports and company statements following allegations from short sellers. Benchmark analysts have maintained a Buy rating on AppLovin, with a price target of $525, emphasizing the company’s adherence to industry regulations and financial transparency. BofA Securities also kept a Buy rating, setting a higher price target of $580, based on a projected EBITDA growth rate significantly higher than its peers. Meanwhile, AppLovin’s CEO, Adam Foroughi, defended the company against allegations of unethical practices, asserting that the accusations are inaccurate and aimed at manipulating the stock price.

The short reports from Fuzzy Panda Research and Bear Cave accused AppLovin of engaging in ad fraud and potentially illegal activities, such as data theft from Meta Platforms (NASDAQ:META) and violations of app store policies. These reports have raised questions about the legitimacy of AppLovin’s business operations and the sustainability of its rapid growth. Despite these allegations, AppLovin continues to emphasize its compliance with app store policies and the legitimacy of its business model. The company has not yet publicly responded to the latest allegations from Bear Cave. Investors and analysts are closely monitoring the situation, as the company’s ability to address these concerns will be crucial for maintaining investor confidence.

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