Own AppLovin (APP) Stock? This Is the 1 Thing to Watch Now.

Core Viewpoint - AppLovin has experienced significant growth, with its stock rising nearly 1,200% over the past two years, driven by impressive revenue growth and increased investor confidence in the business [1][2]. Group 1: Financial Performance - AppLovin's revenue has increased by over 250% in the last five years, reflecting a compound annual growth rate (CAGR) of more than 20% [1]. - In Q1 2025, the company's revenue surged 40% year over year to $1.5 billion, while gross margin improved to 82% from 72% in the prior year [6]. - Operating expenses decreased, with sales and marketing expenses down 19% and research and development spending down 21% compared to Q1 2024 [7]. Group 2: Market Position and Expansion - AppLovin is expanding its market focus from mobile video games to web-based advertising, including connected TV and e-commerce [11]. - The company has successfully addressed a segment of the advertising market and is now targeting a larger opportunity, which could enhance its growth potential [10][12]. - If successful in its expansion, AppLovin could outperform the S&P 500, given its strong growth rates and profitability [12]. Group 3: Investor Sentiment - AppLovin's stock valuation has increased from about 10 times sales five years ago to over 20 times sales currently, indicating improved investor sentiment [2]. - Investors are advised to monitor the company's performance as it expands its strategy, especially with upcoming financial results expected on August 6, 2025 [14].