AppLovin (APP) stock rocketed to a record high on Thursday after the mobile app marketing platform delivered a heady beat-and-raise report.
The Palo Alto, Calif.-based company late Wednesday said it earned $1.25 a share on sales of $1.2 billion in the third quarter. Analysts polled by FactSet had expected earnings of 92 cents a share on sales of $1.13 billion. On a year-over-year basis, AppLovin earnings rose 317% in the September quarter while sales increased 39%.
↑
X
Keep Calm And Trade On: Measuring Post-Election Market Sentiment
For the current quarter, the company forecast revenue of $1.25 billion, based on the midpoint of its outlook. Analysts had been looking for $1.18 billion in the fourth quarter. In the year-earlier quarter, AppLovin posted revenue of $953 million.
At least six Wall Street analysts raised their price targets on AppLovin stock on the news.
In morning trades on the stock market today, AppLovin stock jumped more than 42% to 240.68, putting it in record-high territory. It ended the regular session Wednesday at 168.55.
AppLovin’s software platform enables app developers to market, monetize and analyze their apps. The company also makes mobile games such as “Wordscapes,” “Matchington Mansion” and “Game of War.”
AppLovin Stock Driver: E-Commerce Opportunity
Wedbush Securities analyst Michael Pachter maintained his outperform rating on AppLovin stock and upped his price target to 270 from 170.
“AppLovin continues to impress with outsized revenue growth and incredible EBITDA (earnings before interest, taxes, depreciation and amortization) conversion,” Pachter said in a client note.
Further, AppLovin looks to add a new revenue stream from e-commerce.
“Management made clear that virtually all of its Software Platform business is derived from delivering mobile gaming ads to mobile gaming players,” Pachter said. “The company has recently begun beta testing an e-commerce solution as part of its platform that allows national and local businesses to acquire customers who play mobile games by delivering ads on the Axon 2.0 platform.”
With the e-commerce tool, local businesses can acquire customers who are playing mobile games near their location. For instance, a pizza parlor could offer a coupon for a pizza to a nearby gamer, Pachter said.
The e-commerce solution also could be used by national advertisers to drive brand awareness, he said.
AppLovin stock is on the IBD Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE:
Duolingo Stock Drops As Earnings Beat Is Lost In Translation
Video Game Firm Take-Two Clears September-Quarter Hurdles, Trips On Outlook
See Stocks On The List Of Leaders Near A Buy Point
Find Winning Stocks With MarketSurge Pattern Recognition & Custom Screens
