Should You Buy, Sell, or Hold AppLovin Stock Before Q1 Earnings?
The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at $1.45, indicating 116.4% growth from the year-ago reported quarter. The consensus estimate for revenues stands at $1.38 billion, implying 30.2% year-over-year growth. There has been no change in analyst estimates or revisions lately.
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The company has an impressive earnings surprise history. Earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, with an earnings surprise of 23.5%, on average.
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Q1 Earnings Beat Seems Unlikely for APP
Our proven model doesn't conclusively predict an earnings beat for APP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
APP has an Earnings ESP of 0.00% and a Zacks Rank #3. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
You can see the complete list of today's Zacks #1 Rank stocks here.
Software Platform Should Drive Performance Growth
We expect year-over-year improvement in the company's top line in the to-be-reported quarter to be driven mainly by an increase in the Software Platform. The consensus estimate for the Software Platform revenues is pegged at $1.05 billion, indicating 54.3% year-over-year growth. The consensus mark for Appsrevenuesis pegged at $331.7 million, suggesting a 12.7% year-over-year decline.
The consensus mark for the Software Platform's adjusted EBITDA is pegged at $829.4 million, suggesting 68.6% year-over-year growth. APP's adjusted EBITDA is expected to decrease 16.8% year over year.
APP Stock is in a Great Mood
APP has rallied a staggering 300% over the past year, easily outpacing the broader industry's 27% gain. In contrast, competitors like Alphabet GOOGL and Meta Platforms META have delivered mixed results. Alphabet shares slipped 2% during the same time frame, highlighting weakness in parts of its ad-driven business. Meanwhile, Meta Platforms climbed 29%, benefiting from its strong position in social media advertising. Both Alphabet and Meta Platforms remain major players, but AppLovin's specialized platform is delivering superior returns in this niche.
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