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Applovin Corp Cl A(APP-Q)

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AppLovin (APP) Stock Trades Up, Here Is Why

StockStory - Thu Feb 15, 12:01PM CST

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What Happened:

Shares of mobile app advertising platform AppLovin (NASDAQ: APP) jumped 24.7% in the morning session after the company reported fourth-quarter results with revenue, adjusted EBITDA, and EPS exceeding Wall Street's expectations. The solid performance was driven by a combination of factors, including a strong holiday season, mobile advertising market growth, and software platform improvements. Looking ahead, guidance for Q1 2024 revenue and adjusted EBITDA were both convincingly ahead as well. Overall, this was a really good quarter that should please shareholders.

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What is the market telling us:

AppLovin's shares are very volatile and over the last year have had 26 moves greater than 5%. But moves this big are very rare even for AppLovin and that is indicating to us that this news had a significant impact on the market's perception of the business.

The biggest move we wrote about over the last year was 6 months ago, when the stock gained 18.5% on the news that the company reported second quarter results that exceeded analysts' expectations for revenue, adjusted EBITDA, and earnings per share, driven by the successful roll-out of its new AI-based advertising engine, AXON 2.0. At 44%, this was the highest adjusted EBITDA margin the business recorded over the past five years and a testament to the success of the upgrade of its advertising platform from AXON 1 to AXON 2. Looking ahead, revenue and EBITDA guidance for the next quarter blew past analysts' expectations. Overall, it was a strong quarter for the company, with the results highlighting the success of its AI-based ad engine.

AppLovin is up 46.9% since the beginning of the year. Investors who bought $1,000 worth of AppLovin's shares at the IPO in April 2021 would now be looking at an investment worth $873.47.

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