In the latest close session, AppLovin (APP) was down 2.87% at $673.82. The stock trailed the S&P 500, which registered a daily loss of 0.74%. Elsewhere, the Dow lost 0.63%, while the tech-heavy Nasdaq lost 0.76%.
The stock of mobile app technology company has risen by 6.23% in the past month, leading the Business Services sector's gain of 2.83% and the S&P 500's gain of 0.79%.
The upcoming earnings release of AppLovin will be of great interest to investors. The company is predicted to post an EPS of $2.89, indicating a 67.05% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $1.6 billion, reflecting a 16.86% rise from the equivalent quarter last year.
APP's full-year Zacks Consensus Estimates are calling for earnings of $9.32 per share and revenue of $5.57 billion. These results would represent year-over-year changes of +105.74% and +18.2%, respectively.
Any recent changes to analyst estimates for AppLovin should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.06% lower within the past month. AppLovin presently features a Zacks Rank of #3 (Hold).
In terms of valuation, AppLovin is currently trading at a Forward P/E ratio of 74.46. This represents a premium compared to its industry average Forward P/E of 18.56.
Also, we should mention that APP has a PEG ratio of 3.72. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Technology Services industry was having an average PEG ratio of 1.72.
The Technology Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 92, placing it within the top 38% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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AppLovin Corporation (APP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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