In December last year, $AppLovin(APP.US) touched its all-time high of $733, and then began a rollercoaster ride that plummeted as soon as it started. First, a short-seller report hammered it down, followed by the SEC announcing an investigation into AppLovin's data collection practices, and short-sellers shouting "data fraud"—a series of negative factors piled up, resulting in a 38% drop from the peak to now.

But the fundamentals haven't collapsed: Q4 revenue was $1.66 billion, up 66% year-over-year, with an adjusted EBITDA margin as high as 84%, and free cash flow for the single quarter was $1.31 billion. This is a company that almost "prints money"—its ad AI platform Axon relies on algorithmic precision targeting with extremely low marginal costs, crushing peers in terms of profit margin.

The biggest uncertainty: The SEC investigation is still ongoing, with "active and ongoing" being the official wording. No one knows when or how this uncertainty will be resolved. Additionally, Meta and new competitors are increasing their mobile ad investments, so it's worth watching whether the moat is being slowly eroded.

Currently at $459, the analyst average target price is $648, with all 24 analysts recommending buy and 0 sell. The next earnings report is on May 13th.

The fundamentals are strong, the stock price is discounted, and the SEC is a sword hanging overhead—what's your take on this blade?