AppLovin is the IBD Stock Of The Day as the mobile app marketing platform hits a buy point three weeks after its upbeat second-quarter earnings report.
In morning trades on the stock market today, AppLovin stock broke out of a six-week consolidation pattern at a buy point of 91.91, according to IBD MarketSurge charts. The stock gained 4.1% to close at 91.61.
AppLovin stock has been on a steady climb since it delivered its Q2 earnings report on Aug. 7.
AppLovin's software platform enables app developers to market, monetize and analyze their apps. The company also makes mobile games such as "Wordscapes," "Ink Inc." and "Matchington Mansion."
A key business driver for AppLovin has been its Axon 2.0 AI-powered ad tech software.
AppLovin Stock: Q2 Results And Outlook
In the second quarter, AppLovin earned 89 cents a share on sales of $1.08 billion. On a year-over-year basis, AppLovin earnings jumped 305% while sales increased 44%.
For the current quarter, AppLovin predicted revenue of $1.125 billion, up 30%, based on the midpoint of its outlook. Wall Street had been looking for third-quarter sales of $1.1 billion.
Oppenheimer analyst Martin Yang rates AppLovin stock as outperform with a price target of 105.
"APP is the top pick in our coverage," Yang said in an Aug. 8 client note. "Its market leadership, superior financial profile, strong execution, and upside potential from nongaming verticals are underappreciated by most long-term investors."
APP Stock Is On Two IBD Lists
Yang noted that many investors are skeptical about the company's ability to maintain growth of 20%-plus in its software platform business.
"Despite APP's track record in the past year, we expect many to stay skeptical over the next 12 months," he said. "We believe such sentiment is the source of APP's 'discount' to peers and provides a good opportunity to buy the stock."
AppLovin stock ranks first out of 37 stocks in IBD's Computer Software-Specialty Enterprise industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 98 out of 99.
Further, APP stock is on two IBD lists: SwingTrader and Tech Leaders.
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