AppLovin (NASDAQ:APP) Stock Price Down 5.4% - Here's Why

Key Points

• AppLovin Corporation's stock price fell by 5.4% to $472.75 during mid-day trading, amidst significant volume decline compared to average trading sessions.
• Amidst the drop, research analysts have mixed opinions on AppLovin, with Wedbush maintaining an "outperform" rating and a $620.00 price target, while Wall Street Zen downgraded the stock from "buy" to "hold."
• The company reported strong quarterly earnings of $2.26 per share, outpacing expectations, but revenues of $1.26 billion fell short of analyst estimates, showcasing volatility in its performance.

AppLovin Corporation (NASDAQ:APP - Get Free Report)'s stock price fell 5.4% during mid-day trading on Friday . The stock traded as low as $475.39 and last traded at $472.75. 2,429,982 shares traded hands during mid-day trading, a decline of 65% from the average session volume of 6,967,969 shares. The stock had previously closed at $499.97.

Analyst Upgrades and Downgrades

A number of research analysts recently issued reports on APP shares. Wedbush restated an "outperform" rating and set a $620.00 price target on shares of AppLovin in a research note on Thursday, August 7th. Wall Street Zen cut AppLovin from a "buy" rating to a "hold" rating in a report on Saturday, August 9th. Piper Sandler raised their price objective on AppLovin from $470.00 to $500.00 and gave the company an "overweight" rating in a research note on Thursday, August 7th. The Goldman Sachs Group raised their price target on AppLovin from $335.00 to $435.00 and gave the stock a "neutral" rating in a research report on Friday, May 9th. Finally, BTIG Research lifted their price objective on AppLovin from $480.00 to $483.00 and gave the company a "buy" rating in a research report on Wednesday, July 23rd. Two investment analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating, three have given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the stock has an average rating of "Moderate Buy" and an average target price of $482.86.

AppLovin Stock Performance

The company has a quick ratio of 2.74, a current ratio of 2.74 and a debt-to-equity ratio of 3.01. The company has a 50-day moving average price of $398.93 and a 200-day moving average price of $348.84. The firm has a market capitalization of $165.82 billion, a price-to-earnings ratio of 69.64, a P/E/G ratio of 2.72 and a beta of 2.44.

AppLovin (NASDAQ:APP - Get Free Report) last released its earnings results on Wednesday, August 6th. The company reported $2.26 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.05 by $0.21. AppLovin had a return on equity of 252.67% and a net margin of 45.72%.The company had revenue of $1.26 billion during the quarter, compared to analyst estimates of $1.37 billion. During the same quarter in the prior year, the company earned $0.89 earnings per share. The company's revenue for the quarter was up 77.1% on a year-over-year basis. As a group, equities research analysts forecast that AppLovin Corporation will post 6.87 earnings per share for the current year.

Insider Activity

In related news, insider Victoria Valenzuela sold 15,000 shares of AppLovin stock in a transaction dated Monday, August 25th. The stock was sold at an average price of $450.00, for a total transaction of $6,750,000.00. Following the sale, the insider directly owned 304,955 shares of the company's stock, valued at $137,229,750. This trade represents a 4.69% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Arash Adam Foroughi sold 26,200 shares of AppLovin stock in a transaction dated Friday, August 22nd. The stock was sold at an average price of $440.23, for a total value of $11,534,026.00. Following the sale, the chief executive officer directly owned 2,590,054 shares in the company, valued at approximately $1,140,219,472.42. This trade represents a 1.00% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 1,122,938 shares of company stock valued at $497,688,184. 13.66% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently modified their holdings of the business. Norges Bank bought a new position in AppLovin during the 2nd quarter worth about $951,541,000. Dynasty Wealth Management LLC raised its position in shares of AppLovin by 117,664.4% in the first quarter. Dynasty Wealth Management LLC now owns 2,702,694 shares of the company's stock valued at $716,133,000 after buying an additional 2,700,399 shares in the last quarter. Price T Rowe Associates Inc. MD raised its position in AppLovin by 36.7% during the first quarter. Price T Rowe Associates Inc. MD now owns 6,588,483 shares of the company's stock valued at $1,745,752,000 after purchasing an additional 1,769,400 shares in the last quarter. Vanguard Group Inc. raised its position in AppLovin by 7.3% during the first quarter. Vanguard Group Inc. now owns 17,830,675 shares of the company's stock valued at $4,724,594,000 after purchasing an additional 1,213,536 shares in the last quarter. Finally, Baillie Gifford & Co. boosted its stake in shares of AppLovin by 29.0% in the 1st quarter. Baillie Gifford & Co. now owns 5,270,355 shares of the company's stock valued at $1,396,486,000 after purchasing an additional 1,185,859 shares in the last quarter. 41.85% of the stock is owned by institutional investors and hedge funds.

About AppLovin

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.

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