AppLovin stock surges 228% YTD, showing strong financial performance and growth potential

From Nasdaq
October 1, 2024 10:11 AM:

AppLovin Corporation’s stock (APP) has surged 227.6% year-to-date, outperforming industry and S&P 500. Competitors MicroStrategy (MSTR) and Fair Isaac (FICO) saw surges of 166.9% and 67%, respectively. APP closed at $127.8 near its 52-week high, with a bullish sentiment among investors. The key question for investors is whether current growth justifies buying.

AppLovin showed strong financial performance in 2023 and the second quarter of 2024, with significant revenue and EBITDA growth. The company’s operational efficiency and strategic execution led to impressive results. Despite concerns about in-game advertising and non-gaming ventures, AppLovin’s growth potential remains high.

AppLovin is expanding its software business to new verticals beyond gaming. By offering in-app mobile game video ad inventory to e-commerce websites, the company aims to drive growth outside its original market. Management projects 20-30% growth in software business without the need to expand to other sectors, potentially boosting overall growth.

APP’s liquidity ratio of 2.28 in Q2 2024 exceeds the industry average of 0.92, indicating a strong position to meet short-term obligations. With a Zacks Consensus Estimate of $4.4 billion in 2024 revenues, representing 35.2% growth, and a projected earnings per share of $3.5, APP is expected to continue strong top and bottom-line growth.

Analysts have shown confidence in AppLovin’s performance, with upward revisions in earnings estimates for 2024 and 2025. This indicates a positive outlook for the company’s financial performance. AppLovin’s strong financials, operational efficiency, and expansion into new verticals make it a compelling investment option with a Zacks Rank #1 (Strong Buy).

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Read more at Nasdaq: AppLovin Stock Gains 228% YTD: Should You Buy or Wait for a Dip?