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Chicago, IL – August 8, 2025 – Today, Zacks Investment Ideas feature highlights AppLovin (APP - Free Report) .
Buy the Spike in AppLovin Stock Post-Q2 Earnings?
AppLovin continued its growing popularity as one of the market’s top momentum stocks after exceeding its Q2 expectations on Wednesday evening.
The marketing and technology provider for apps has seen its stock spike as much as +16% in today’s trading session to over $400 a share, sitting on staggering gains of nearly +1000% in the last three years.
Blowing away the returns of the broader indexes, it’s certainly a worthy topic of whether investors should chase the post-earnings rally in AppLovin’s stock.
AppLovin’s Strong Q2 Results
Driven by continued strength in gaming advertising, AppLovin’s Q2 sales rose 16% year over year to $1.25 billion and beat estimates of $1.21 billion by 4%. Furthermore, this marked AppLovin’s sixth consecutive quarter of more than $1 billion in sales.
More impressive, Q2 earnings soared 154% from $0.89 a share in the prior period to $2.26, eclipsing EPS expectations of $1.99 by 13%. Also illustrated in the price performance chart above, AppLovin has now exceeded the Zacks EPS Consensus for nine consecutive quarters, with an average earnings surprise of 22.36% over the last four quarters.
AppLovin’s Favorable Guidance
Fueling AppLovin’s post-earnings rally, the technology services leader provided favorable guidance for the third quarter, expecting Q3 sales between $1.32-$1.34 billion and above the current Zacks Consensus of $1.31 billion or 9% growth.
Additionally, AppLovin forecasts Q3 adjusted EBITDA at $1.07-$1.09 billion on an 81% margin, with the company stating these targets position it to continue driving strong growth and value for its partners and shareholders.
APP Technical Analysis & Valuation Comparison
To the delight of technical traders, AppLovin stock recently surged past its 50-day simple moving average (SMA), which is now at $365 as depicted by the green line below, and signals short-term strength. Falling below this price point but staying above its 200-day SMA (Red Line) of $331 may be of optimal interest for those looking to buy on the dip.
This buy-the-dip scenario may appeal to fundamental investors as well, as APP currently trades at 46.5X forward earnings, a noticeable but not overly stretched premium to the benchmark S&P 500’s 24.2X and its Zacks Technology Services Industry average of 21X.
In terms of price-to-forward-sales, APP does trade at a high premium of 24.8X compared to the S&P 500’s 5.4X and the industry average of 2.1X.
Bottom Line
AppLovin stock currently lands a Zacks Rank #3 (Hold). The company's expansion does suggest it will continue to grow into its somewhat lofty valuation, but more upside from here will likely depend on what is hopefully a very positive trend of earnings estimate revisions (EPS) following its favorable Q2 report and guidance. For now, there could be better buying opportunities ahead that will be more reassuring to long-term investors.
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Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: AppLovin
For Immediate Release
Chicago, IL – August 8, 2025 – Today, Zacks Investment Ideas feature highlights AppLovin (APP - Free Report) .
Buy the Spike in AppLovin Stock Post-Q2 Earnings?
AppLovin continued its growing popularity as one of the market’s top momentum stocks after exceeding its Q2 expectations on Wednesday evening.
The marketing and technology provider for apps has seen its stock spike as much as +16% in today’s trading session to over $400 a share, sitting on staggering gains of nearly +1000% in the last three years.
Blowing away the returns of the broader indexes, it’s certainly a worthy topic of whether investors should chase the post-earnings rally in AppLovin’s stock.
AppLovin’s Strong Q2 Results
Driven by continued strength in gaming advertising, AppLovin’s Q2 sales rose 16% year over year to $1.25 billion and beat estimates of $1.21 billion by 4%. Furthermore, this marked AppLovin’s sixth consecutive quarter of more than $1 billion in sales.
More impressive, Q2 earnings soared 154% from $0.89 a share in the prior period to $2.26, eclipsing EPS expectations of $1.99 by 13%. Also illustrated in the price performance chart above, AppLovin has now exceeded the Zacks EPS Consensus for nine consecutive quarters, with an average earnings surprise of 22.36% over the last four quarters.
AppLovin’s Favorable Guidance
Fueling AppLovin’s post-earnings rally, the technology services leader provided favorable guidance for the third quarter, expecting Q3 sales between $1.32-$1.34 billion and above the current Zacks Consensus of $1.31 billion or 9% growth.
Additionally, AppLovin forecasts Q3 adjusted EBITDA at $1.07-$1.09 billion on an 81% margin, with the company stating these targets position it to continue driving strong growth and value for its partners and shareholders.
APP Technical Analysis & Valuation Comparison
To the delight of technical traders, AppLovin stock recently surged past its 50-day simple moving average (SMA), which is now at $365 as depicted by the green line below, and signals short-term strength. Falling below this price point but staying above its 200-day SMA (Red Line) of $331 may be of optimal interest for those looking to buy on the dip.
This buy-the-dip scenario may appeal to fundamental investors as well, as APP currently trades at 46.5X forward earnings, a noticeable but not overly stretched premium to the benchmark S&P 500’s 24.2X and its Zacks Technology Services Industry average of 21X.
In terms of price-to-forward-sales, APP does trade at a high premium of 24.8X compared to the S&P 500’s 5.4X and the industry average of 2.1X.
Bottom Line
AppLovin stock currently lands a Zacks Rank #3 (Hold). The company's expansion does suggest it will continue to grow into its somewhat lofty valuation, but more upside from here will likely depend on what is hopefully a very positive trend of earnings estimate revisions (EPS) following its favorable Q2 report and guidance. For now, there could be better buying opportunities ahead that will be more reassuring to long-term investors.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.