Applied Digital (APLD): fair value

Fair-value band

The normal range for this name runs from $7 (cheap) to $81 (expensive); it is now priced at $21.

That is 0.9σ below this name's own normal premium.

Standing premium not backed by fundamentals: nothing in this company's health score has changed to earn the rating the market normally gives it.

Is Applied Digital undervalued?

Fair, relative to its own history. Applied Digital trades at $21, 12% below the fair value this model estimates, but it has habitually traded 85% above fair value, and today's gap is 0.9σ below that norm, within the range it normally trades in, so the verdict is Fair: priced normally for itself, not necessarily fairly valued. The health score behind that pricing hasn't moved to earn it, though: read Fair here as “priced the way this name normally is”, not as a claim the price is justified.

Diligence checklist

1 pass · 3 fail · 7 no data

• N/ACash actually collected from profit, last 12 months: n/aXBRL · Applied Digital lost money in every quarter of the window. Dividing cash flow by a loss says nothing about earnings quality, so I'm leaving this one unscored rather than printing a ratio that reads like an answer.
• FAILGap between paper profit and real cash: -9.2%XBRL · Applied Digital collected more cash than it booked as profit, by 9.2% of everything it owns. That is the conservative direction, but it is far enough past my 5% line to flag: a gap this wide usually means something large and non-cash is running through the earnings, and I want to know what it is before I trust the profit figure.
• N/ADebt compared to one year of cash earnings: n/aXBRL · Applied Digital's earnings before interest, tax and depreciation are negative or can't be worked out over the window, so this ratio has nothing to divide by. A negative figure there is a finding in its own right: read it off the return-on-capital line above rather than as a clean bill of health on debt.
• FAILHow much more it earns on capital than that capital costs: -9.31ppXBRL (dealbreaker) · Applied Digital earns 9.3 points LESS on the capital it employs than that capital costs. Every dollar reinvested here destroys value instead of creating it, which turns growth into a reason to worry rather than a reason to own the business. It has been below its cost of capital for 18 straight quarters, which is 4.5 years. That is capital destruction rather than a cheap stock, and it is where I stop work. The gap is wider than it was at the start of the window.
• PASSStock sold by executives and directors on the open market, last 6 months: $4.2MEDGAR · Insiders at Applied Digital sold $4.2M of stock on the open market in the last 6 months, which is inside the $5 million line I draw. Selling that size is ordinary diversification rather than a signal about the business. The sellers: Nottenburg Richard N $3.9M, Miller Douglas S $0.3M. Options being exercised, and shares held back to cover the tax on them, are not sales and I don't count them either. filing ↗
• N/AHow long the CEO has run this company: n/aTEXT · I couldn't establish when Applied Digital's current chief executive took the job: no appointment appears in the 8-K item 5.02 history.
• N/AProfit margin held up during the last sales slump: n/aXBRL · There's no revenue downturn in Applied Digital's filed record, or gross profit isn't tagged, so this test has nothing to measure. It needs a bad patch to look at: without one, whether customers would stay through a price rise is untested rather than proven.
• N/ANormal profit margin across a full business cycle: n/aXBRL · There is no valuation for Applied Digital, so there is no normal margin to test the current one against.
• N/AHow much of the stock trades on an average day: $592MMARKET · Applied Digital trades about $592M of stock a day. Taking a fifth of that for ten sessions, I could build or exit roughly $1,184M without leaning on the price. There's no pass or fail here because the answer depends on how big a position I'd actually want to take.
• N/AShare of revenue from its single biggest customer: not establishedTEXT · I fetched and read Applied Digital's July 29, 2026 10-K but found no sentence about customer concentration. That isn't the same as the filing saying there is none: it may simply be worded in a way my search doesn't catch. Read Item 1 and the concentration-of-risk note yourself before trusting this row. filing ↗
• FAILWhether the company switched auditors in the last 2 years: yes, 2025-06-20EDGAR (dealbreaker) · Companies sometimes switch the accounting firm that signs off their books right before something bad is uncovered, which is why I look. Applied Digital changed auditors on June 20, 2025. The change itself is a hard fact; the reason for it is written in prose, so read the filing before treating this as the red flag it may be. filing ↗