What Investors Need to Know

AppLovin (APP) closed the latest trading day at $344.82, indicating a +1.12% change from the previous session’s end. The stock exceeded the S&P 500, which registered a gain of 0.73% for the day. Meanwhile, the Dow gained 0.16%, and the Nasdaq, a tech-heavy index, added 0.98%.

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The the stock of mobile app technology company has risen by 2.3% in the past month, leading the Business Services sector’s gain of 0.33% and the S&P 500’s gain of 0.34%.

The investment community will be closely monitoring the performance of AppLovin in its forthcoming earnings report. The company is expected to report EPS of $1.27, up 159.18% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $1.26 billion, showing a 31.88% escalation compared to the year-ago quarter.

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For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.06 per share and a revenue of $4.59 billion, signifying shifts of +314.29% and +39.92%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for AppLovin. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the company’s business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.03% higher. AppLovin is holding a Zacks Rank of #1 (Strong Buy) right now.

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Investors should also note AppLovin’s current valuation metrics, including its Forward P/E ratio of 84.07. This denotes a premium relative to the industry’s average Forward P/E of 26.46.

Meanwhile, APP’s PEG ratio is currently 4.2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. APP’s industry had an average PEG ratio of 1.5 as of yesterday’s close.

The Technology Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 64, this industry ranks in the top 26% of all industries, numbering over 250.

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