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Chicago, IL – August 13, 2025 – Zacks Equity Research shares AppLovin APP as the Bull of the Day and Carter CRI as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Gorilla Technology Group Inc. GRRR, Palantir Technologies Inc. PLTR and Rezolve AI PLC RZLV.
Here is a synopsis of all five stocks:
AppLovin is a name I've been following since it was just a fraction of its current size, and it has only grown more compelling as an investment opportunity. The company has carved out a dominant position in the mobile app ecosystem, operating an exceptionally profitable business model in one of the most advantaged verticals in the market: mobile advertising and app monetization.
What sets AppLovin apart is its combination of cutting-edge AI-driven ad technology, growing network effects, and a proven track record of scaling revenue and profitability at an impressive pace. It also currently holds a Zacks Rank #1 (Strong Buy) rating, reflecting a wave of positive earnings estimate revisions. Technically, the stock is showing strong momentum as well, having just broken out of a long consolidation, indicating the next bull run may have just begun.
AppLovin is also actively enhancing its already strong business economics. The company has been making a concerted push to integrate artificial intelligence deeper into its workflows, driving meaningful gains in productivity, efficiency, and operating margins. This increased operating leverage means more revenue is flowing directly to the bottom line, amplifying earnings growth.
At the helm is a founder-CEO with a reputation for laser focus and disciplined execution. Under his leadership, AppLovin executed impressively, not deviating from the company's core plan or allowing for bloat to accumulate.
In addition, the company's e-commerce advertising business is still in the early stages of scaling, representing a potentially powerful new revenue stream. As this segment ramps, it should diversify AppLovin's business mix and further accelerate growth.
After cooling off for just a short period, earnings estimates are again being lifted. Current quarter estimates have risen by 6.4% in the last week, next quarter by 9.35% and next year's estimates by nearly 13%.
Earnings are projected to climb nearly 100% this year and 51% next year, while the company is trading at a relatively high but not egregious 34.6x next year's earnings.
After only a brief pause in momentum, Wall Street analysts are once again raising their expectations for AppLovin. In just the past week, current-quarter earnings estimates have climbed 6.4%, next quarter's have jumped 9.35%, and next year's have surged nearly 13%. This renewed wave of upward revisions underscores growing confidence in the company's execution and outlook.
The growth forecasts are impressive by any standard. Earnings are projected to nearly double in 2025, followed by an additional 51% jump in 2026. While APP trades at a forward earnings multiple of 34.6x next year's earnings, which is high, but not egregious, the valuation looks far more reasonable when discounting those very high growth forecasts.
From early 2024 to February 2025, AppLovin delivered one of the most extraordinary runs in the market, climbing more than 1,000% in just over a year. That parabolic rally eventually gave way to a sharp correction this spring, followed by several months of choppy action.
This consolidation phase helped reset investor expectations and allowed the stock to digest its massive gains. In technical terms, this created a large and well-defined bull flag pattern.
Now, the breakout has arrived. Shares have pushed above the upper boundary of the flag with conviction, supported by rising volume and improving fundamentals. With little overhead resistance until all-time highs, the technical picture suggests the potential for a sustained move higher and likely run into uncharted territory.
AppLovin checks all the boxes, with exceptional fundamentals, accelerating earnings estimates, expanding market opportunities, and a technical setup pointing to another leg higher. With AI integration driving efficiency, a sharp leadership team and new revenue streams beginning to scale, the company's growth story has legs. For investors seeking exposure to one of the most innovative and profitable players in the market, AppLovin remains a compelling buy.
When it comes to identifying potential short candidates or stocks to steer clear of, apparel brands are often high on my list. The industry is notoriously difficult, as consumer trends shift quickly, brand loyalty can be fleeting, and managing seasonal inventory is a constant balancing act. Even the strongest names stumble when demand softens or fashion trends miss the mark.
Carter's, the well-known children's apparel maker with numerous brands, is a clear example of these challenges in action. The company has been grappling with declining sales, a share price stuck in a prolonged downtrend, and now, a wave of downward revisions to its earnings estimates. These headwinds, combined with a tough retail environment, make Carter's a stock that investors may want to avoid for now.
Carter's also faces a difficult macro backdrop, with inflation, high interest rates, weak consumer confidence, and tariff uncertainty. First-quarter 2025 sales fell 4.8% year over year, with declines across US Retail (-4.3%), US Wholesale (-5.3%), and International (-4.9%) segments.
Margins also weakened and lower volumes drove gross margin down 140 bps and operating income down 35.7%. Tariffs remain a major cost challenge, particularly as most production is in Asia, leaving limited nearshoring alternatives. The stock underperforms the sector, which has struggled too.
Investor sentiment toward Carter's has weakened further as analysts slash their earnings forecasts. Over the past month, estimates for the current quarter have been cut by 13.3%, while full-year 2025 projections have fallen 4.2%. Looking ahead, 2026 earnings estimates have dropped even more sharply, down 13.6%, which together gives the stock a Zacks Rank #5 (Strong Sell) rating.
On the top line, the outlook remains sluggish. Sales are now expected to decline 1.7% in 2025, followed by only a modest 0.9% rebound in 2026. This combination of downward earnings revisions and muted growth expectations underscores the headwinds facing the company and helps explain the recent weakness in the stock.
Given the combination of falling sales, and persistent tariff and macroeconomic headwinds, Carter's faces an uphill battle. The earnings downgrades signal that analysts remain cautious on the company's near-term prospects, and the modest sales rebound projected for next year are unlikely to be enough to reignite investor enthusiasm.
With shares already underperforming both the broader market and the retail apparel sector, and visibility into a turnaround still limited, CRI appears positioned for continued pressure. Until there's clear evidence of a sustainable recovery in demand and profitability, investors may be better served looking for opportunities elsewhere.
Global technology solution provider Gorilla Technology Group Inc. is set to report first-half 2025 results on Aug. 14, 2025, before the opening bell.
The Zacks Consensus Estimate for second-quarter 2025 earnings is currently pegged at 13 cents per share on revenues of $19 million. For the first quarter of 2025, it has already reported adjusted earnings of 23 cents, beating the consensus estimate of 1 cent and improving from the year-ago loss of $1.47. It also generated revenues of $18.3 million, marking a more than 109% year-over-year jump, but missed the consensus mark of $20 million.
The Zacks Consensus Estimate for second-quarter 2025 earnings has witnessed one downward revision and no movement in the opposite direction in the past 60 days.
The full-year 2025 earnings estimate is currently pegged at 97 cents per share, indicating a 115.8% year-over-year improvement. The same for revenues is pegged at $100.01 million, marking a 33.9% increase from a year ago.
Our proven model does not conclusively predict an earnings beat for the company 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. That's not the case here.
For the June quarter, GRRR has an Earnings ESP of 0.00% and currently has a Zacks Rank #1. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
You can see the complete list of today's Zacks #1 Rank stocks here.
London-based Gorilla Technology is likely to have continued its expansion in the first half, thanks to growing demand for its effective and efficient services and global agreements. The first quarter results revealed a strong start to the half. Growth in AI-driven security and edge computing solutions is expected to have boosted the top line in the to-be-reported period.
Growing sales in MENA, Asia, South America and the U.K. are expected to have driven its performance. For the full year 2025, it expects gross margin within 40-45% and witnessed the first-quarter gross margin being 500 points below its target. As activity is expected to have picked up the second quarter, margins are likely to have improved. Its aggressive expense-curtailing efforts, strategic focus on high-margin opportunities and commitment to product innovations will likely to have provided support.
Second quarter investment in ONE AMAZON partnership is expected to have increased by the company. With rising collections towards the end of the quarter, its cash position is likely to have improved. Management earlier referenced qualified backlog of around $93 million for 2025, with substantial portions expected to materialize in the second half, leaving a lower portion for the first half.
Gorilla Technology's stock has declined 6.8% in the year-to-date period against the industry's growth of 19.1%. Among its peers, Palantir Technologies Inc. has jumped 141.6% during this time while Rezolve AI PLC has fallen further by 20.9%. Meanwhile, the S&P 500 has grown 8.5%.
Now, let's look at the value Gorilla Technology offers investors at current levels.
The company's valuation looks cheap compared with the industry average. Currently, GRRR is trading at 2.92X forward 12-month sales, below the industry's average of 3.21X. In comparison, Palantir and Rezolve are currently trading at 86.09X and 9.91X, respectively.
Although an earnings beat is uncertain at the moment, Gorilla Technology is sitting on a $5.6 billion active global pipeline covering 87 projects, with plans to lock in $1.3 billion in long-term contracts by mid-2026, including MOUs and late-stage negotiations. Recent capital moves have strengthened its balance sheet, $105 million raised via a registered direct offering has lifted cash reserves, while debt remains low at $16.5 million on favorable terms.
The company has also reaffirmed its partnership with Hewlett Packard Enterprise, boosting both market credibility and speed-to-market in sovereign and mission-critical infrastructure projects. Key growth drivers are already in motion: a nationwide smart education rollout in Thailand serving 6.5 million students, and the upcoming "ONE AMAZON" environmental initiative, set to debut during New York Climate Week with revenue contributions expected in the fourth quarter of 2025.
With a strong financial footing, accelerating global contracts, deepening presence in Asia, and a valuation still offering room for upside, GRRR appears well-positioned for investors looking for scalable growth in AI-powered infrastructure. Currently, it trades below the Wall Street average price target of $31 per share, indicating a massive 84.2% upside from current levels.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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This article originally published on Zacks Investment Research (zacks.com).
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