Stock splits, which occur when a company divides its existing shares into multiple shares, effectively increasing the outstanding shares while maintaining the same market capitalization, have been all the rage on Wall Street over the past few years, with companies like Amazon, Nvidia, and Tesla participating in the frenzy.
Growth stocks have been helping propel the stock market higher for the past decade. Although the market has been off to a choppy start in 2025, there is good reason to believe that growth stocks can continue to lead it higher in the years ahead.
Morgan Stanley expects a bunch of US companies to benefit if a federal ban on TikTok goes into effect on Sunday. There have been reports that the renowned social platform for sharing short videos plans on drawing the curtains on its app in the United States on January 19th.
I have a buy rating on AppLovin due to its strong Q3 results, high-growth potential, and favorable technical setup ahead of Q4 earnings. APP's Q3 GAAP EPS of $1.25 beat expectations, with revenue up 39% YoY; the stock surged 46% post-earnings. APP's scalable business model, high margins, and robust revenue growth justify its premium valuation despite macroeconomic and interest rate risks.
AppLovin's strategic partnership with Google Cloud has significantly improved its unit economics, benefiting both the company and its customers, leading to strong performance in 2024. The company's expansion into e-commerce is expected to contribute ~10% of total ad dollars it earns, enhancing ad platform economics and driving future growth. Management's positive outlook on e-commerce and robust ad performance signal potential revenue growth of 27% y/y in CY25, with adj. EBITDA margins reaching 56-57%.
Why investors should use the Zacks Earnings ESP tool to help find stocks that are poised to top quarterly earnings estimates.
AppLovin's integrated platform revolutionized mobile game advertising, driving a 700% stock surge in 2024 and unlocking a multibillion-dollar market. The company excels in inventory, sell-side, demand-side, and analytics, akin to a 'Google' for mobile games, with high margins and operational leverage. APP aims for 20%-30% annual revenue growth, with e-commerce ads poised to become a significant revenue driver by 2025.
AppLovin (APP) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
AppLovin (APP) closed the most recent trading day at $315.68, moving -0.88% from the previous trading session.
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There's no shortage of fast-growing companies benefiting from massive trends that are reshaping industries. Tapping into growth stocks at the right time and sticking with them for years to come can be one of the best ways to build wealth.
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