AppLovin (NASDAQ:APP) Stock Jumps 31% After Better-Than-Expected Earnings

AppLovin Corporation (NASDAQ:APP) was up 31% during mid-day trading on Thursday following a stronger than expected earnings report. The company traded as high as $365.33 and last traded at $356.10. 22,051,239 shares were traded during mid-day trading, an increase of 295% from the average session volume of 5,585,568 shares. The stock had previously closed at $271.75.

The company reported $4.30 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.03 by $0.27. AppLovin had a net margin of 64.58% and a return on equity of 193.10%. The firm had revenue of $2.18 billion for the quarter, compared to analyst estimates of $2.07 billion. During the same period in the previous year, the firm earned $2.45 EPS. AppLovin’s revenue was up 55.5% on a year-over-year basis.

AppLovin News Summary

Here are the key news stories impacting AppLovin this week:

• Positive Sentiment: AppLovin reported Q3 revenue of $2.18 billion, up 55.5% year over year, and earnings per share of $4.30, both above analyst estimates. Net income rose 72% to about $1.44 billion. AppLovin delivers strong Q3 numbers
• Positive Sentiment: Q4 revenue guidance of $2.365 billion to $2.395 billion topped expectations, supporting hopes that growth in the company’s AI-powered advertising platform can continue as its newer models roll out. Revenue outlook tops estimates
• Positive Sentiment: The company generated roughly $1.4 billion in free cash flow and increased its share-repurchase authorization to $3.6 billion, adding a potential source of support for shareholders. Q3 earnings-call highlights
• Positive Sentiment: RBC raised its price target to $520 and maintained an Outperform rating, saying the Q3 performance supports further growth. RBC on AppLovin’s Q3 outperformance
• Neutral Sentiment: Analysts and investors will be watching whether the expanded rollout of AppLovin’s ad models sustains growth. Some commentary noted that long-term growth visibility remains uncertain even after the strong quarter. BofA on growth visibility
• Negative Sentiment: AppLovin faces a securities class action alleging that executives made misleading statements about the readiness and adoption of its AI models and self-service ad tools. The allegations add legal and reputational risk; they have not been established as fact. Class-action investigation notice

Wall Street Analysts Forecast Growth

APP has been the topic of a number of research analyst reports. Phillip Securities raised shares of AppLovin from a “moderate buy” rating to a “strong-buy” rating and reduced their price target for the company from $635.00 to $610.00 in a research note on Tuesday, August 11th. Weiss Ratings raised shares of AppLovin from a “hold (c)” rating to a “hold (c+)” rating in a research report on Friday, October 16th. Morgan Stanley dropped their target price on shares of AppLovin from $450.00 to $400.00 and set an “overweight” rating for the company in a report on Tuesday, October 13th. The Goldman Sachs Group boosted their target price on AppLovin from $400.00 to $445.00 and gave the company a “neutral” rating in a research report on Thursday. Finally, Royal Bank Of Canada upped their price target on AppLovin from $500.00 to $520.00 and gave the stock an “outperform” rating in a research note on Thursday. Three investment analysts have rated the stock with a Strong Buy rating, seventeen have issued a Buy rating and eight have issued a Hold rating to the company. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $497.14.

Institutional Trading of AppLovin

A number of institutional investors and hedge funds have recently bought and sold shares of APP. Signature Estate & Investment Advisors LLC grew its holdings in shares of AppLovin by 3,695.3% in the second quarter. Signature Estate & Investment Advisors LLC now owns 76,361 shares of the company’s stock valued at $39,345,000 after purchasing an additional 74,349 shares in the last quarter. Insight Wealth Strategies LLC acquired a new stake in AppLovin during the 2nd quarter worth approximately $6,939,000. Generate Investment Management Ltd acquired a new stake in AppLovin during the 2nd quarter worth approximately $7,226,000. Saudi Central Bank boosted its position in AppLovin by 88.7% in the 2nd quarter. Saudi Central Bank now owns 16,070 shares of the company’s stock valued at $8,280,000 after buying an additional 7,555 shares during the period. Finally, Nykredit A S purchased a new position in AppLovin in the 2nd quarter valued at approximately $41,902,000. 41.85% of the stock is currently owned by hedge funds and other institutional investors.

AppLovin Trading Up 31.0%

The company’s 50 day simple moving average is $290.82 and its 200 day simple moving average is $411.84. The firm has a market cap of $119.17 billion, a price-to-earnings ratio of 27.37, a P/E/G ratio of 0.55 and a beta of 2.51. The company has a debt-to-equity ratio of 1.11, a current ratio of 4.30 and a quick ratio of 4.30.

AppLovin Company Profile

AppLovin Corporation is a technology company that provides software and services designed to help mobile application developers grow, monetize and operate their businesses. Its platform supports user acquisition, advertising, mediation, analytics and other functions across the mobile app ecosystem.

The company’s principal products include AppDiscovery, which helps developers market their applications and acquire users; MAX, an in-app bidding and monetization platform; and its AXON technology, an artificial intelligence-powered engine intended to improve advertising performance and match users with relevant applications and content.