AppLovin Corporation (APP) stock is an under-the-radar Wall Street star that’s skyrocketed 1,300% since the end of 2022, blowing away Nvidia and tons of other artificial intelligence darlings grabbing all the headlines.
AppLovin’s impressive earnings growth outlook has APP stock trading at cheap valuation levels even though it has ripped 55% higher in the last month alone.
AppLovin hit fresh highs in September, breaking above its 2021 peaks as the app-monetization company’s earnings outlook soars.
AppLovin is gaining steam as app makers fall in love with its AI-boosted features that help them grow in the hyper-competitive digital app market. And APP’s earnings outlook for 2025 keeps climbing.
Why AppLovin is a Strong Growth Tech Stock to Buy
AppLovin Corporation designs tools to help app developers improve marketing, revenue generation, and beyond to boost profitable expansion.
APP’s products and solutions enable companies and app developers to acquire and keep their ideal users, increase value across a customer’s lifecycle, measure their marketing and reach, and much more.
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AppLovin rolled out its enhanced, machine learning and AI engine AXON technology in the second quarter of 2023. In the second quarter of 2024, APP said AXON’s “enhancements through ongoing self-learning” and its “dedicated development efforts have fueled robust business performance.”
APP’s machine learning and AI engine is generating impressive results for AppLovin’s clients across mobile gaming and beyond.
AppLovin boasts that it connects its clients to “audiences in-app, on mobile devices, across CTV, and beyond so your business can do more, accelerate faster, and achieve meaningful growth.”
APP’s portfolio of products and solutions help its customers increase their average revenue per daily user, acquire “valuable” users, increase in-app purchases, scale ad impressions, and more.
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AppLovin helps its clients hone in on consumers who are “likely to drive in-app purchases, then re-engage them throughout their lifecycle.”
AppLovin brings the “right users” to their customers’ app and helps “keep them engaged with AppLovin’s suite of solutions.”
AppLovin’s AI-Boosted Growth and Outlook
AppLovin’s AI-enhanced features are boosting ROI for APP’s clients, leading to surging sales and earnings for AppLovin.
AppLovin posted 17% revenue growth in 2023. This came against slightly higher 2022 revenue, following its massive Covid-boost 2021 where APP roughly doubled its revenue (93% growth). Digital advertising spending has roared back following the 2022 downturn that hit Meta (META Quick QuoteMETA – Free Report) and tons of others.
AppLovin topped our second quarter 2024 EPS estimate by 16%, marking its fourth-straight double-digit beat. APP grew its adjusted earnings by 305% last quarter, on the back of 44% revenue growth, fueled by 75% Software Platform sales expansion.
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AppLovin is projected to grow its sales by 35% in 2024 and add another 14% to the top line next year—to jump from $3.28 billion in FY23 to $5.04 billion in 2025.
AppLovin’s adjusted earnings are projected to skyrocket 253% from $0.98 a share last year to $3.46 a share in 2024 and then climb 28% higher in FY25 to $4.43 a share.
APP’s consensus Zacks earnings estimates have soared roughly 153% for FY24 and 164% for FY25 during the past 12 months. These impressive upward revisions include a 13% jump for 2024 since its Q2 release and 19% improvement for 2025.
AppLovin’s most accurate/most recent EPS estimate for 2025 came in 9% above its greatly improved consensus ($4.81 vs. $4.43). APP’s improved bottom-line outlook helps it earn a Zacks Rank #1 (Strong Buy).
Other Reasons to Buy AppLovin Stock
AppLovin shares have skyrocketed 1,300% since late 2022, crushing Nvidia’s (NVDA) 720% and Meta’s 400%. APP’s run includes a 250% YTD surge, topping Nvidia’s 150% and Meta’s 66%.
AppLovin stock has ripped 55% higher in the last month to break out to new highs, surpassing its 2021 peaks in the back half of September.
Part of APP’s recent run was spurred by a bullish note from Bank of America analyst Omar Dessouky where he reiterated his buy rating and “top pick” designation for AppLovin stock.
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APP stock has climbed over 100% since its April 2021 IPO to blow away the Zacks Tech sector’s 45% surge. AppLovin shares might be a tad overheated right now, alongside other growth stocks.
But AppLovin’s valuation is far from overheated. AppLovin trades at a 95% discount to its all-time highs at 32.3X forward 12-month earnings. APP also trades at a 25% discount to its median (two-year chart is below).
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It’s Not Too Late to Buy Soaring AppLovin Stock
APP’s 21-day moving average has provided bullish support throughout its comeback. Market-timers might want to wait for a pullback to APP’s 21-day or 50-day moving averages before pulling the trigger.
That said, long-term investors should benefit from AppLovin’s long-term upside even if they buy after its recent surge.
APP is also buying back its stock. Most crucially, AppLovin’s AI-boosted portfolio is playing a critical role in the highly competitive world of digital apps.
AppLovin helps its customers thrive in a world where countless companies fight for eyeballs, downloads, screentime, and profitable success in our smartphone and app-obsessed world.
— Benjamin Rains
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