Why AppLovin Stock Trounced the Market Today

Adtech company AppLovin (APP +6.42%) was showered with love by the market on the second-to-last trading day of the week. It was no wonder — the company published first quarter results that delivered a pair of convincing beats on analyst estimates. It was rewarded for this with a 6%-plus increase in its share price by grateful investors.

Not just playing games

AppLovin unveiled those results just after market close on Wednesday, revealing that the niche tech company’s revenue grew a sturdy 59% year over year to $1.84 billion. The company’s net income adjusted for discontinued operations was $1.2 billion ($3.56 per share), more than double the year-ago quarter’s $576 million.

Image source: Getty Images.

Both line items landed comfortably above the consensus analyst estimates, which were $1.78 billion for revenue and $3.42 per share for adjusted net income.

During the conference call discussing the quarter’s results, management said it experienced revenue growth in both its core gaming segment and its rapidly burgeoning (and recently reworked) consumer vertical.

AppLovin Stock Quote

Today’s Change

(6.42%) $30.08

Current Price

$498.91

A top-line beat on Q2 guidance

AppLovin also proffered guidance for its current (second) quarter, stating that it expects revenue ranging from just under $1.92 billion to nearly $1.95 billion; the average analyst projection is $1.9 billion. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to land at a bit below $1.62 billion to almost $1.65 billion.

Given that both the gaming and “new” consumer verticals seem to be roaring just now, I’d be bullish on AppLovin’s future. The mobile app advertising market remains underdeveloped and underserved, and this company is effectively filling the void.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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