AppLovin (NASDAQ:APP) Trading 13% Higher Following Better-Than-Expected Earnings

Key Points

• AppLovin's shares surged 13% after the company reported quarterly earnings of $2.26 EPS, surpassing expectations of $2.05.
• The company experienced a 77.1% year-over-year revenue growth, with quarterly revenue of $1.26 billion, although it fell short of analysts’ target of $1.37 billion.
• Wall Street analysts have boosted their price targets for AppLovin, with ratings ranging from "neutral" to "overweight", and an average price target of $449.00.

AppLovin Corporation (NASDAQ:APP - Get Free Report)'s share price traded up 13% during trading on Thursday after the company announced better than expected quarterly earnings. The stock traded as high as $453.76 and last traded at $441.34. 12,846,509 shares were traded during mid-day trading, an increase of 80% from the average session volume of 7,154,347 shares. The stock had previously closed at $390.57.

The company reported $2.26 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.05 by $0.21. AppLovin had a net margin of 45.72% and a return on equity of 274.45%. The firm had revenue of $1.26 billion for the quarter, compared to the consensus estimate of $1.37 billion. During the same period in the prior year, the firm posted $0.89 earnings per share. The firm's quarterly revenue was up 77.1% compared to the same quarter last year.

Analyst Ratings Changes

A number of research firms recently issued reports on APP. Jefferies Financial Group lifted their price target on shares of AppLovin from $460.00 to $530.00 and gave the company a "buy" rating in a research note on Thursday, May 8th. Morgan Stanley increased their price objective on shares of AppLovin from $460.00 to $480.00 and gave the company an "overweight" rating in a report on Thursday. The Goldman Sachs Group boosted their target price on shares of AppLovin from $335.00 to $435.00 and gave the stock a "neutral" rating in a research note on Friday, May 9th. Wedbush reaffirmed an "outperform" rating and issued a $620.00 price target on shares of AppLovin in a research note on Thursday. Finally, Oppenheimer reiterated an "outperform" rating and issued a $500.00 price objective (down from $560.00) on shares of AppLovin in a report on Thursday, May 8th. One investment analyst has rated the stock with a sell rating, three have assigned a hold rating, nineteen have given a buy rating and one has given a strong buy rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average price target of $472.33.

Insider Activity at AppLovin

In other AppLovin news, Director Herald Y. Chen sold 171,420 shares of the stock in a transaction on Tuesday, May 13th. The stock was sold at an average price of $373.77, for a total transaction of $64,071,653.40. Following the sale, the director owned 221,209 shares in the company, valued at approximately $82,681,287.93. This represents a 43.66% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Arash Adam Foroughi sold 100,000 shares of the company's stock in a transaction dated Wednesday, May 21st. The shares were sold at an average price of $367.51, for a total transaction of $36,751,000.00. Following the completion of the transaction, the chief executive officer owned 2,760,363 shares in the company, valued at approximately $1,014,461,006.13. This trade represents a 3.50% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 1,212,968 shares of company stock worth $455,062,980. 13.66% of the stock is owned by company insiders.

Hedge Funds Weigh In On AppLovin

A number of hedge funds have recently made changes to their positions in the stock. Fuller & Thaler Asset Management Inc. acquired a new stake in shares of AppLovin during the fourth quarter valued at about $25,000. Atala Financial Inc bought a new stake in AppLovin during the first quarter valued at $26,000. Hilltop National Bank acquired a new stake in AppLovin during the second quarter worth about $26,000. LFA Lugano Financial Advisors SA bought a new stake in shares of AppLovin in the 2nd quarter worth approximately $26,000. Finally, Alpine Bank Wealth Management acquired a new position in shares of AppLovin during the first quarter valued at $27,000. Institutional investors and hedge funds own 41.85% of the company's stock.

AppLovin Price Performance

The stock has a market capitalization of $153.48 billion, a price-to-earnings ratio of 64.82, a price-to-earnings-growth ratio of 2.33 and a beta of 2.43. The business's 50 day simple moving average is $365.28 and its 200-day simple moving average is $339.24. The company has a debt-to-equity ratio of 6.10, a quick ratio of 1.68 and a current ratio of 1.68.

AppLovin Company Profile

AppLovin Corporation engages in building a software-based platform for advertisers to enhance the marketing and monetization of their content in the United States and internationally. It operates through two segments, Software Platform and Apps. The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; MAX, an in-app bidding software that optimizes the value of a publisher's advertising inventory by running a real-time competitive auction; Adjust, a measurement and analytics marketing platform that provides marketers with the visibility, insights, and tools needed to grow their apps from early stage to maturity; and Wurl, a connected TV platform, which distributes streaming video for content companies and provides advertising and publishing solutions through its AdPool, ContentDiscovery, and Global FAST Pass products.