AppLovin (NASDAQ:APP) Shares Gap Down - Here's Why

Key Points

• Shares gapped down: AppLovin opened at $412.35 versus a prior close of $436.69 and was trading near $395, down about 8.3% on heavy volume.
• Fundamentals were strong—Q4 EPS $3.24 beat estimates and revenue rose 66% to $1.66B—but several brokers trimmed price targets while the consensus remains a Moderate Buy with an average target of $654.50.
• Significant insider selling: A director sold 163,910 shares (~$74.3M) and the CEO sold 50,000 shares (~$23.3M), with insiders disposing of 365,244 shares (~$169.6M) over the past 90 days.

AppLovin Corporation (NASDAQ:APP - Get Free Report) gapped down prior to trading on Thursday . The stock had previously closed at $436.69, but opened at $412.35. AppLovin shares last traded at $395.3470, with a volume of 1,806,963 shares changing hands.

Analyst Upgrades and Downgrades

Several brokerages recently commented on APP. Citigroup dropped their price target on AppLovin from $820.00 to $710.00 and set a "buy" rating for the company in a research report on Thursday, February 12th. The Goldman Sachs Group lowered their price target on shares of AppLovin from $710.00 to $585.00 and set a "neutral" rating on the stock in a research report on Thursday, February 12th. UBS Group set a $740.00 target price on shares of AppLovin in a research note on Thursday, February 12th. Zacks Research lowered AppLovin from a "strong-buy" rating to a "hold" rating in a research report on Thursday, February 12th. Finally, Wedbush lifted their price objective on AppLovin from $465.00 to $640.00 and gave the stock an "outperform" rating in a research report on Thursday, February 12th. Twenty equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company's stock. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $654.50.

AppLovin Stock Down 8.3%

The firm's fifty day simple moving average is $463.84 and its two-hundred day simple moving average is $571.98. The company has a current ratio of 3.32, a quick ratio of 3.32 and a debt-to-equity ratio of 1.65. The company has a market capitalization of $135.06 billion, a price-to-earnings ratio of 41.01, a price-to-earnings-growth ratio of 0.76 and a beta of 2.51.

AppLovin (NASDAQ:APP - Get Free Report) last released its quarterly earnings results on Wednesday, February 11th. The company reported $3.24 EPS for the quarter, beating the consensus estimate of $2.89 by $0.35. The firm had revenue of $1.66 billion for the quarter, compared to analyst estimates of $1.61 billion. AppLovin had a net margin of 57.42% and a return on equity of 245.64%. The business's revenue for the quarter was up 66.0% compared to the same quarter last year. During the same quarter in the previous year, the company earned $1.73 EPS. Sell-side analysts anticipate that AppLovin Corporation will post 6.87 EPS for the current year.

Insider Buying and Selling at AppLovin

In other news, Director Eduardo Vivas sold 163,910 shares of the business's stock in a transaction that occurred on Monday, March 16th. The shares were sold at an average price of $453.49, for a total value of $74,331,545.90. Following the sale, the director directly owned 6,969,382 shares of the company's stock, valued at approximately $3,160,545,043.18. The trade was a 2.30% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Arash Adam Foroughi sold 50,000 shares of the company's stock in a transaction that occurred on Wednesday, March 11th. The stock was sold at an average price of $466.04, for a total transaction of $23,302,000.00. Following the completion of the transaction, the chief executive officer owned 2,480,414 shares in the company, valued at approximately $1,155,972,140.56. This represents a 1.98% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 365,244 shares of company stock valued at $169,584,607 over the last 90 days. 13.66% of the stock is owned by insiders.

Institutional Trading of AppLovin

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Board of the Pension Protection Fund purchased a new stake in shares of AppLovin in the 4th quarter valued at $27,000. Washington Trust Advisors Inc. lifted its position in shares of AppLovin by 160.0% during the fourth quarter. Washington Trust Advisors Inc. now owns 39 shares of the company's stock worth $27,000 after purchasing an additional 24 shares in the last quarter. Mcguire Capital Advisors Inc. acquired a new stake in shares of AppLovin during the fourth quarter worth about $27,000. Chilton Capital Management LLC purchased a new position in shares of AppLovin in the third quarter valued at approximately $29,000. Finally, Activest Wealth Management grew its holdings in shares of AppLovin by 760.0% in the third quarter. Activest Wealth Management now owns 43 shares of the company's stock valued at $31,000 after purchasing an additional 38 shares in the last quarter. Hedge funds and other institutional investors own 41.85% of the company's stock.

AppLovin Company Profile

AppLovin Corporation is a Palo Alto–based mobile technology company that provides software and services to help app developers grow and monetize their businesses. The company operates a data-driven advertising and marketing platform that connects app publishers and advertisers, delivering tools for user acquisition, monetization, analytics and creative optimization. AppLovin's technology is integrated into a broad set of mobile applications through software development kits (SDKs) and ad products designed to maximize revenue and engagement for developers.

Key components of AppLovin's offering include an ad mediation and exchange platform that enables publishers to manage and monetize inventory across multiple demand sources, and a user-acquisition platform that helps advertisers target and scale campaigns.

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