AppLovin Surges 6% Pre-Market — Momentum Signals Rally May Have More Room To Run

Shares of AppLovin Corp (NASDAQ:APP) climbed 6.28% in pre-market trading on Thursday after the marketing platform issued better-than-expected quarterly results and an upbeat revenue forecast.

Revenue Guidance Exceeds Expectations

The company reported a Q3 revenue of $1.41 billion, which was higher than the estimated $1.34 billion. The third-quarter earnings stood at $2.45 per share, also beating the anticipated $2.41 per share.

Compared to the previous year, total revenue saw a 68% increase. Both cash flow from operations and free cash flow for the quarter were reported at $1.05 billion.

AppLovin projects its Q4 revenue to be between $1.57 billion and $1.60 billion, compared to the estimated $1.55 billion. The company also anticipates a Q4 adjusted EBITDA of $1.29 billion to $1.32 billion.

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Strong Momentum Amid Regulatory Scrutiny

The strong Q3 report comes after a tumultuous period for AppLovin. In October, the company’s shares have been under pressure following reports of potential investigations by multiple state attorneys general.

Despite this, the company bounced back later in the month, with shares rising after news of an SEC investigation into the company's data-collection practices.

Furthermore, analysts have highlighted AppLovin’s potential in the digital advertising sector. Bank of America has reiterated its Buy rating and $860 price forecast for the company, citing its ability to absorb the expected surge in e-commerce ad demand through 2026. The analysts even suggested that the company could turn mobile games into the next big e-commerce playground.

AppLovin Price Action: On a year-to-date basis, shares have risen 80.54%. They were trading at $ 655.83 at last check, per Benzinga Pro.

AppLovin holds a momentum rating of 97.30% and a growth rating of 56.55%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. Check the detailed report here.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.