After hitting an all-time high of $525.15 in February, AppLovin Corp.'s (NASDAQ: APP) share price tumbled more than 35% due to a pending class action lawsuit and to short seller reports.
AppLovin (APP) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
I am upgrading AppLovin (APP) to 'Strong Buy' as its financial growth far outpaces its modest 2025 share price appreciation. APP's valuation is highly attractive, with strong revenue and EPS growth, bullish earnings revisions, and a forward P/E ratio that justifies current multiples. Upcoming Q2 earnings look bullish due to positive EPS revisions and strategic divestments, positioning APP for improved long-term profitability.
AppLovin (APP 1.18%) is an advertising-technology (adtech) stock that's up nearly 1,200% over just the last two years, as of this writing. These incredible gains were fueled by stunning revenue growth and an extraordinary surge in investor confidence in the underlying business.
AppLovin's advertising revenue rose 71% YoY to $1.16 billion, while advertising adjusted EBITDA surged 92% to $943 million. Axon's AI engine improved ad net revenue per install by 49%, despite minimal changes in publisher or user base. Free cash flow more than doubled in four years, reaching $826 million, with operating leverage driven by automation and disciplined reinvestment.
AppLovin is a dominant AdTech player with unique AI-driven platforms, strong growth, and industry-leading margins, justifying long-term optimism despite current overvaluation. My DCF and peer comparisons show APP is overvalued by 55%, but its robust fundamentals and market leadership support a long-term buy thesis. APP's software platform drives exceptional revenue growth, and management's strategic focus on AI and market expansion underpins future sustainability.
Recently, Zacks.com users have been paying close attention to AppLovin (APP). This makes it worthwhile to examine what the stock has in store.
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AppLovin (APP) closed the most recent trading day at $363.78, moving +2.33% from the previous trading session.
AppLovin is transforming into a pure-play software company, leveraging its AI-driven AXON platform to disrupt digital advertising beyond mobile gaming. The company's advertising segment is the primary growth engine, with strong Q1 FY25 results: 71% YoY revenue growth and expanding margins. The strategic divestiture of the mobile gaming business and a new focus on web-based advertising unlock a much larger total addressable market.
AppLovin's transformation into an AI-powered ad platform with its Axon engine has driven exceptional revenue growth and profitability, supporting my Strong Buy rating. The company's divestment from gaming and focus on AI marketing expands its total addressable market, especially in e-commerce and web advertising. Continuous R&D and Axon's self-learning capabilities create a robust competitive moat, driving superior advertiser ROI and long-term compounding potential.