$APP daily pick: small starter buy, add down to $230

$APP: I'm starting a small position here and I'd add down to $230.

37% below the 200-day and 62% off the December high
About 14x next year's EPS estimate with revenue up 53% last quarter
77% operating margin and almost no net debt

I think the lawsuits are mostly priced in because the business is still growing fast and printing cash while the stock trades like it's broken.

Not financial advice

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Why small? I could easily be early. It's in a clear downtrend under a falling 200-day ($439) and it made a new 52-week low at $258 this morning before bouncing about 7%. I'm leaving room to add between $230 and $260.

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Bear case: a securities class action over its AI tool claims, a San Diego County suit over kids' data and the Unity fight over ad data. Wells Fargo also called the e-commerce pixel spike a false start. Any of these can keep the multiple low for a while.

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Catalyst: Q3 results come Nov 4 after the close. The guide was $2.055B to $2.085B in revenue, 46% to 48% growth. Hitting that at this price would get attention. Missing again is the main risk.

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What I'd watch: a close back above the 50-day ($310) tells me the selling is done. A weekly close under the April 2025 low ($200.50) means I'm wrong and I'd step aside.

Sources: FMP: APP quote, price history, 50/200 DMA, 52-week range, TTM ratios, analyst EPS estimates · AppLovin IR: Q3 2026 results on Nov 4 after the close · Q2 2026 revenue $1.924B (+52.8%) and Q3 guide $2.055B to $2.085B · Benzinga: San Diego County kids data lawsuit, SEC probe closed · Yahoo Finance: securities class action over AI tool disclosures · 24/7 Wall St: Wells Fargo calls pixel install spike a false start

Not financial advice. For informational and educational purposes only.