Beautiful Breakout and strong fundamentals - AppLovin

2 mar 2024

APP has an outstanding chart in my opinion. I've been following this stock for years now and waiting for the right time to get in. Although it's already rallied 70% YTD, the momentum this particular stock has combined with it's increasingly impressive earnings reports make it a strong buy.

They have been steadily increasing cash flow on top of accelerating earnings growth. The last 3 quarters it's beat analyst estimates and it's my personal opinion that we are in the midst of a era where web apps as well as mobile apps are being developed very rapidly, increasingly by individuals and smaller companies.

Net Income, Margins and Returns on Equity and Assets are all increasing. No wonder it's more than quadrupled since it's bottom of $9.00

Think of Streamlit, for you coders, and Snowflake's SNOW increasing presence in owning these, and similar technologies. APP is operating in a similar space and they really offer it all when it comes to building applications for your business.

The estimate revisions are surprising and look very strong going into next year.

See the Zack's Estimate Revisions below. (Current Quarter/Next Current Year/Next)

CQ NQ CY NY
Current 0.56 0.59 2.48 3.08
7 Days Ago 0.56 0.59 2.48 3.08
30 Days Ago 0.33 0.31 1.56 1.71
60 Days Ago 0.33 0.31 1.58 1.71
90 Days Ago 0.33 0.31 1.58 1.63

2 mar 2024

Nota

Notice the magnitude change in earnings estimates from 30 days to 7 days ago. Analysts are really loving this stock. I think some are reluctant to issue a higher price target after it's rallied so much, but I believe this will be a stock that defies expectations.

Also notable is the significant increase in volume after this last earnings report.