AppLovin Earnings Due After Stock Bounces from Weakness
AppLovin (NYSE: APP), a prominent player in the tech sector, is scheduled to announce its earnings on Wednesday, which is expected to introduce volatility in its stock this week. The company’s shares recently experienced a notable rebound, rising 7% on Monday, following a report from Jefferies that maintained a bullish outlook despite a 40% year-to-date decline in the stock price.
Stock Performance Overview
AppLovin's stock had previously reached a double top near $750 at the end of 2025 before experiencing a significant drop to $400. However, the stock has since bounced back to around $460. Jefferies analyst James Heaney has set a target price of $860, predicting that the company will exceed revenue expectations in the fourth quarter.
Market Sentiment and Analyst Insights
The mobile technology company has faced skepticism regarding the impact of artificial intelligence on its advertising platform, particularly with the emergence of new tools from competitors like CloudX, Meta Audience Network, and Google Genie. However, Heaney has characterized these concerns as “overblown risks,” asserting that the current stock price does not accurately reflect AppLovin’s underlying business strength.
Valuation and Growth Projections
Currently, AppLovin is trading at 15 times Jefferies’ fiscal year 2027 EBITDA estimates, which is considered low for a company expected to grow its revenue by over 50% in fiscal year 2026. Heaney's confidence in this projection is supported by survey data and expert checks indicating positive trends in both AppLovin’s core gaming business and its expanding e-commerce division.
Analyst Upgrades and Market Conditions
Following the stock's decline, other analysts have also shown support for AppLovin. Needham upgraded the stock to a Buy rating with a target price of $700, citing strong e-commerce revenue growth anticipated for 2026. Piper Sandler has maintained an $800 price target, highlighting consistent year-over-year growth in the number of sellers on the platform.
Market Context
The broader market has stabilized after a period of aggressive selling, particularly in the technology sector, with the Nasdaq 100 index rising by 1% during Monday’s trading session. This positive momentum could further support a rally in AppLovin’s stock if the company successfully beats revenue expectations.
Upcoming Earnings Release
AppLovin is set to release its earnings after the market closes on Wednesday. Historically, the company has exceeded earnings expectations in the last four quarters, with surprise upside ranging from 3.38% to 35.16%.