Applovin (APP, Financial) is witnessing a downturn, with its shares dropping by $20.12, settling around $324.25. The options market is notably active, with trading volumes surpassing normal levels as 90,000 contracts have been exchanged. Call options slightly outnumber puts, resulting in a put/call ratio of 0.93, which is elevated compared to the usual 0.6.
The implied volatility, or IV30, has climbed by 2.5 points to 61.65, positioning it in the lower 25% of this year's range. This suggests the stock might experience daily fluctuations of approximately $12.59. Additionally, a steeper put-call skew has emerged, indicating a heightened interest in options for protection against downward price movements.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for AppLovin Corp (APP, Financial) is $479.49 with a high estimate of $650.00 and a low estimate of $250.00. The average target implies an upside of 47.66% from the current price of $324.72. More detailed estimate data can be found on the AppLovin Corp (APP) Forecast page.
Based on the consensus recommendation from 26 brokerage firms, AppLovin Corp's (APP, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for AppLovin Corp (APP, Financial) in one year is $93.51, suggesting a downside of 71.2% from the current price of $324.72. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the AppLovin Corp (APP) Summary page.
APP Key Business Developments
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AppLovin Corp (APP, Financial) reported a 40% increase in total revenue year-over-year, reaching $1.5 billion, showcasing strong business growth.
- The company achieved an impressive 83% increase in adjusted EBITA, reaching $1 billion, with a 68% adjusted EBITA margin.
- AppLovin Corp (APP) generated $826 million in free cash flow, marking a 113% increase year-over-year.
- The company announced a strategic move to sell its games business, allowing it to sharpen its focus on advertising.
- AppLovin Corp (APP) is advancing its e-commerce and web advertising solutions, with plans to launch a self-service dashboard, which is expected to unlock significant growth opportunities.
Negative Points
- The company faces scrutiny from short sellers, which could impact investor confidence.
- AppLovin Corp (APP) is still in the early stages of its web advertising model, which may take time to fully develop and optimize.
- There is a potential impact from tariffs on web-based advertising, although the company believes it is well-positioned to manage these changes.
- The company is resource-limited in onboarding new web advertisers, which has slowed down the pace of new customer additions.
- AppLovin Corp (APP) acknowledges that its current web advertising model does not work perfectly for all customers, indicating room for improvement.
