Insider Transaction: Herald Chen Sells $146K Worth Of AppLovin Shares

On December 11, a recent SEC filing unveiled that Herald Chen, President & CFO at AppLovin APP made an insider sell.

What Happened: Chen opted to sell 400 shares of AppLovin, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The transaction's total worth stands at $146,464.

In the Wednesday's morning session, AppLovin's shares are currently trading at $318.5, experiencing a down of 0.8%.

Unveiling the Story Behind AppLovin

AppLovin Corp is a mobile app technology company. It focuses on growing the mobile app ecosystem by enabling the success of mobile app developers. The company's software solutions provide tools for mobile app developers to grow their businesses by automating and optimizing the marketing and monetization of their applications.

AppLovin: A Financial Overview

Revenue Growth: AppLovin's revenue growth over a period of 3 months has been noteworthy. As of 30 September, 2024, the company achieved a revenue growth rate of approximately 38.64%. This indicates a substantial increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Information Technology sector.

Holistic Profitability Examination:

• Gross Margin: The company sets a benchmark with a high gross margin of 77.5%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, AppLovin exhibits below-average bottom-line performance with a current EPS of 1.29.

Debt Management: With a high debt-to-equity ratio of 3.74, AppLovin faces challenges in effectively managing its debt levels, indicating potential financial strain.

Financial Valuation Breakdown:

• Price to Earnings (P/E) Ratio: AppLovin's stock is currently priced at a premium level, as reflected in the higher-than-average P/E ratio of 97.59.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 26.02 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio of 56.03 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

The Impact of Insider Transactions on Investments

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

The Insider's Guide to Important Transaction Codes

Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of AppLovin's Insider Trades.

Insider Buying Alert: Profit from C-Suite Moves

Benzinga Edge reveals every insider trade in real-time. Don't miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. Click here for access.

This article was generated by Benzinga's automated content engine and reviewed by an editor.