Investors may want to jump on the bandwagon with AppLovin (APP) as the company’s earnings estimates have been on the upswing, signaling a promising trajectory for the stock price. The recent short-term price momentum in the stock could be just the beginning, given the ongoing improvement in earnings projections.
Analysts’ increasing confidence in the earnings potential of this mobile app technology company is propelling the estimates higher, and this uptrend is likely to translate into a positive impact on its stock price. Indeed, historical data indicates a robust correlation between earnings estimate revisions and near-term stock price movements—the cornerstone of our Zacks Rank stock rating system.
The Zacks Rank system, known for its five-grade rating scale (ranging from Zacks Rank #1, indicating Strong Buy, to Zacks Rank #5, pointing to Strong Sell), has an externally-audited track record of impressive outperformance. Notably, Zacks #1 Ranked stocks have generated an average annual return of +25% since 2008.
For AppLovin, consensus estimates have seen a substantial uplift for the next quarter and the full year, propelled by a strong consensus among analysts in revising earnings estimates higher.
Current-Quarter Estimate Revisions
The current quarter’s earnings estimate of $0.56 per share reflects a staggering +5700% change from the year-ago figure.
Over the last 30 days, the Zacks Consensus Estimate for AppLovin has surged 71.79%, with two estimates moving higher while no negative revisions have been recorded.
Current-Year Estimate Revisions
For the full year, the company is anticipated to earn $2.32 per share, marking a notable +136.73% change from the previous year’s figure.
An encouraging trend is evident in the estimate revisions for the ongoing year, with six estimates moving up for AppLovin over the past month, compared to no negative revisions. Consequently, the consensus estimate has been raised by 46.83%.
Favorable Zacks Rank
Thanks to the promising estimate revisions, AppLovin currently holds a Zacks Rank #1 (Strong Buy). The Zacks Rank, a proven rating tool, enables investors to leverage the power of earnings estimate revisions to make well-informed investment decisions. Stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) have consistently outperformed the S&P 500, as per our research.
Bottom Line
With AppLovin shares having gained 45.5% over the past four weeks, there’s a clear sign of investors banking on its impressive estimate revisions. This makes a strong case for considering the addition of AppLovin to your portfolio to capitalize on its robust earnings growth prospects.
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