An Attractive Bet in Mobile App Technology Space
AppLovin Corporation (NASDAQ: APP) is a well-known company in the mobile application industry. The company’s software-based platform makes it easy to market and monetize applications offered by mobile application developers. It also offers free mobile games.
The company is headquartered in Palo Alto, CA. It was founded in July 2011 and became a member of the Nasdaq, following an initial public offering (IPO) of its shares, in April 2021.
AppLovin and KKR Denali Holdings LP sold 22.5 million and 2.5 million shares, respectively. The public offering price was $ 80 per share. Through the IPO, the company raised $ 2 billion in gross revenue (or nearly $ 1.35 billion in net income), part of which was used to pay off debts under a revolving line of credit. .
At TipRanks, stocks have a strong buy consensus rating based on 12 purchases. The average APP price target of $ 69.58 reflects a bullish potential of 98.91% from current levels.
A more detailed discussion of AppLovin’s price performance and growth prospects will help investors form an opinion on the shares.
Price performance and market capitalization
The first trading date of AppLovin on the stock exchange was April 15, 2021. The opening price of the day’s shares was $ 70, 12.5% less than the exit price on stock market, and the closing price was $ 65.20, reflecting a 18.5% drop in the stock market price. Since the IPO, AppLovin shares have grown by 50%.
It appears that hedge funds and retail investors have used the weak price of the company’s shares to increase their holdings in shares. According to TipRanks tools, hedge funds have bought 1.1 million APP shares over the last quarter and retail investors with APP stakes have increased 1.3% in the last 30 days.
Currently, the company’s market capitalization stands at $ 13.2 billion.
AppLovin has reported results for five quarters since it was listed on the stock exchange. The bottom line results for the five quarters were below expectations. Results for the second quarter of 2022 to August 2022 should be reported. The consensus estimate for second-quarter earnings is $ 0.15 per share.
In April 2022, AppLovin signed a partnership with The Trade Desk (NASDAQ: TTD), a pioneer in the advertising technology market. The same month, the company acquired Wurl for $ 430 million, improving its market penetration of connected television.
In February 2022, AppLovin announced that its board of directors had approved a $ 750 million share repurchase program. Meanwhile, the company is partnering with HUMAN Security, Inc. to prevent invalid traffic to your platforms. In January 2022, it acquired the MoPub business from Twitter, Inc. (NYSE: TWTR) for $ 1.05 billion.
In December 2021, the company concluded a secondary offering of 7.5 million shares for $ 83 per share. In addition, the company raised $ 1.5 billion in term loans in October 2021.
Promoters and growth projections
The company’s strong footprint in North and South America, Europe and Asia, and growth opportunities through partnerships and acquisitions enhance its attractiveness for investment.
Robust offerings of software solutions, innovation capabilities, a large number of daily active users and high installations on the platforms are also advantageous for the company. AppLovin expects its total addressable market (TAM) to increase CAGR by 10.6% to $ 283 billion in 2024 from $ 189 billion in 2020.
By 2022, the company expects earnings before interest, taxes, depreciation and amortization (EBITDA) to be $ 1.2 billion, more than the $ 1 billion previously forecast. The EBITDA margin is expected to be in the average range of 30% compared to the average of 20% indicated above.
Software revenue is projected to be $ 1.14 billion to $ 1.29 billion in 2022 and $ 2 billion in 2023. In particular, software revenue was $ 674 million in 2021. it expects total revenue to be $ 3.14 billion to $ 3.44 billion by 2022, up from $ 2.79 billion.
Data and opinions
Four days ago, KeyBanc’s Tyler Parker began hedging APP shares with a buy rating and a $ 55 target price (57.23% bullish potential).
According to the TipRanks tool, total traffic to the company’s website increased 124.85% year-on-year by May 2022, 114.04% by the second quarter of 2022, and 289.98% from the beginning of 2022. Increasing the website traffic of the company is based on its main prospects.
The growing use and demand of mobile apps around the world has expanded AppLovin’s growth opportunities. This company could be attractive to investors looking for growth investment stocks. The fall in the price of the company’s shares could be used to gain exposure to the shares.
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