Shares of AppLovin (NASDAQ: APP) plummeted despite strong Q4 growth and positive guidance, losing over 40% of value this year. Revenue surged 66% to $1.66 billion, with EPS up 87% to $3.24 and adjusted EBITDA rising 82% to $1.4 billion. Q1 revenue is projected to grow between 50%-53%.

AppLovin’s growth is driven by its adtech platform Axon 2.0. The company’s gross margin improved to 88.9% in Q4, with operating costs reduced by 9%. It generated $1.3 billion free cash flow in the quarter and $3.95 billion for the year, ending with $1 billion in net debt.

Despite concerns about competition from Meta Platforms in gaming ads, AppLovin is seeing potential growth opportunities. The stock has a forward P/E ratio of under 26.5 based on 2026 estimates. The company is looking to launch a self-service e-commerce platform and pilot AI tools for automation.

AppLovin remains a strong player in the industry, with revenue growth and gross margin expansion. The company’s ability to reduce operating costs while growing quickly is impressive. Consider carefully before investing, despite the stock’s attractive valuation based on analyst estimates.

Read more at Yahoo Finance: AppLovin Shares Crash Despite Stellar Growth. Is It Time to Buy the Stock on the Dip?