AppLovin Shares Surge 34% Despite Q1 Miss
AppLovin Corporation (NASDAQ:APP) shares surged more than 34% on Thursday despite Q1 results coming in worse than the consensus estimates. Quarterly EPS came in at ($0.31) and revenue at $625 million, both missing the Street estimates of ($0.08) and $823.37 million, respectively.
The company lowered its 2022 revenue guidance to a range of $3.14-3.44 billion, below the Street estimate of $3.69 billion, while the adjusted EBITDA estimate was raised to $1.20 billion from $1 billion at the midpoint. The raise reflects the ongoing growth of the Software Platform business and expected operating improvements in Apps.
The rapid growth of the Software Platform and the massive reach post-MoPub acquisition give the company confidence that it is still able to do well with less reliance on first-party data from its games. That means the company will not only reduce UA investments into those games, but also consider divesting the first-party game business if that makes financial sense.
| Symbol | Price | %chg |
|---|---|---|
| CRM.BA | 22150 | 0 |
| GOTO.JK | 69 | 0 |
| GOOGL.SW | 1077.82 | 0 |
| 4684.T | 4700 | 0 |
BofA Analyst Raises AppLovin Price Target, Stock Surges 13%
AppLovin (NASDAQ:APP) shares rose more than 13% intra-day today after BofA Securities analysts increased their price target for the company from $100 to $120, reaffirming a Buy rating on the stock.
After meeting with AppLovin's CEO and CFO in New York, BofA shared insights on why the company remains their top pick. The analysts believe the Software division has the potential to grow by over 20% annually through 2026, significantly outpacing the mobile gaming market’s expected 5% to 10% yearly growth. According to BofA estimates, despite capturing only about a third of the projected ad spend in 2024, AppLovin is well-positioned to generate a majority of new in-app purchase (IAP) revenue for advertisers.
The analysts highlighted that one of the key challenges in the mobile advertising space is effectively matching mobile gamers—an audience of over 3 billion worldwide—with the right games. Currently, mobile ad networks convert around three installs per 1,000 impressions, according to BofA estimates. Even a modest improvement, such as increasing the conversion rate to five installs per 1,000 impressions, could significantly boost industry growth.
Since the first quarter of 2023, AppLovin's AI Engine has proven its ability to enhance install rates, contributing to a 112% growth in the company’s quarterly run rate. The analysts noted that the company’s use of large language models (LLMs) for data collection, still in its early stages, presents further opportunities for long-term growth by continuing to improve matching efficiency.
AppLovin Gains 6% Following Q3 Earnings Report
Shares of AppLovin (NASDAQ:APP) surged more than 6% intra-day today following the announcement of robust earnings for the third quarter.
The company's revenue for the quarter stood at $864.3 million, topping the market's forecast of $798 million. Earnings per share also beat expectations, coming in at 30 cents compared to the predicted 27 cents.
Throughout the year, AppLovin has bought back $1.154 billion of its Class A common stock, with the average purchase price being under $25 per share.
The company also announced that Herald Chen, its President and CFO, will be stepping down from his day-to-day duties by the end of 2023. Despite his transition, Chen will continue to serve on AppLovin's Board of Directors and will become an Advisor to the CEO. Taking over the financial helm, Matt Stumpf, the current Vice President of Finance, has been named the new Chief Financial Officer.
AppLovin Gains 6% Following Q3 Earnings Report
Shares of AppLovin (NASDAQ:APP) surged more than 6% intra-day today following the announcement of robust earnings for the third quarter.
The company's revenue for the quarter stood at $864.3 million, topping the market's forecast of $798 million. Earnings per share also beat expectations, coming in at 30 cents compared to the predicted 27 cents.
Throughout the year, AppLovin has bought back $1.154 billion of its Class A common stock, with the average purchase price being under $25 per share.
The company also announced that Herald Chen, its President and CFO, will be stepping down from his day-to-day duties by the end of 2023. Despite his transition, Chen will continue to serve on AppLovin's Board of Directors and will become an Advisor to the CEO. Taking over the financial helm, Matt Stumpf, the current Vice President of Finance, has been named the new Chief Financial Officer.
AppLovin Stock Jumps 30% Following Q2 Report
AppLovin (NASDAQ:APP) saw its shares skyrocket by more than 30% intra-day today after posting its Q2 results.
The company outperformed predictions with an EPS of $0.22, surpassing the Street estimate of $0.08. Despite a 3% year-over-year decline, revenue reached $750 million, exceeding the Street estimate of $723.97 million. Notably, the Software Platform division experienced substantial growth, surging 28% year-over-year to reach $406 million—a quarterly record. This rise was fueled by AI advancements integrated into AXON, which led to increased installations and higher revenue per installation compared to the previous quarter.
Looking ahead to Q3, AppLovin anticipates revenue in the $780-$800 million range, surpassing the Street estimate of $741.41 million.
What to Expect From AppLovin Corporation’s Q4 Results?
Analysts at Credit Suisse provided their outlook on AppLovin Corporation (NASDAQ:APP) ahead of the company’s Q4 results, which will be reported tomorrow.
The analysts increased their price target on the company’s shares to $128 from $115 as they incorporate the MoPub transaction and recalibrate their model. Their new 2021/2022 Adjusted EBITDA estimates are $705 million/$1080 million.
According to the analysts, the main focus heading into Q4 will be the MoPub transition as other platforms will look to poach publishers. The analysts reiterated their Outperform rating due to (1) operations in the fastest-growing segment in videogames, (2) software to offer more diversified exposure to mobile games secular growth theme, and (3) optionality to expand the total addressable market to non-gaming apps.
