The Resurgence of AppLovin
Ritholtz Wealth Management’s Josh Brown is eager to embrace the best performing stock in the Russell 1000, a company that has been on a remarkable trajectory this year.
Revival and Reinvention
What To Know: Discussing the state of markets on the “The Compound & Friends” podcast, Brown made a compelling argument for investing in the undervalued gem that is AppLovin Corp (APP).
In a rollercoaster journey, AppLovin entered the public domain approximately three years ago, facing turbulent times following its IPO at $80 per share. Despite a dip to below $10 per share in late 2022, the company has mounted an impressive comeback in 2023, with 2024 seeing a meteoric rise of around 93% year-to-date.
The Beloved Outlier
Brown highlighted AppLovin as the standout performer in the Russell 1000, a prestigious index encompassing the top 1000 U.S. companies by market capitalization. While Brown sees the company as ripe for acquisition, he anticipates a modest pullback to the low $70s before making a move.
The AI Advantage
Why It Matters: Beyond the technical allure, Brown is captivated by the robust fundamentals that underpin the stock’s success.
With analysts projecting a 27% earnings growth in 2024, AppLovin’s stronghold in the Artificial Intelligence domain is a key catalyst. Brown highlighted the expanding margins as a testament to the company’s growth trajectory, mentioning the record-high operating margins of 28% in the last quarter.
AppLovin’s prowess lies in its AI-driven advertising platform, enabling app developers to monetize their creations efficiently. Brown marveled at the company’s unique positioning, describing it as a dominant force in the app advertising landscape.
Stock Performance
APP Price Action: At the time of publication, AppLovin shares were valued at $76.81, showcasing a promising uptrend in the market.
Photo: Tung Nguyen from Pixabay.