What Happened?
Shares of mobile app advertising platform AppLovin (NASDAQ: APP) fell 9.9% in the afternoon session after Bank of America analyst Omar Dessouky forecasts a deceleration in app revenue for the fourth quarter of 2024, anticipating a 4% sequential decline. This slowdown is expected despite Q4 typically being a period of strong demand for mobile games.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy AppLovin? Access our full analysis report here, it’s free.
What The Market Is Telling Us
AppLovin’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock dropped 15.9% on the news that the company wasn't added to the S&P 500 Index. On Friday, December 6, 2024, markets speculated that AppLovin was a strong contender to join the Index, meeting criteria such as a market value of at least $18 billion and GAAP profitability over the past four quarters. Following the official announcement of the new list of stocks to be added to the Index, APP's omission might force investors to adjust their expectations, at least for now.
AppLovin is down 4.1% since the beginning of the year, and at $327.87 per share, it is trading 18.3% below its 52-week high of $401.50 from December 2024. Investors who bought $1,000 worth of AppLovin’s shares at the IPO in April 2021 would now be looking at an investment worth $5,029.
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