AppLovin (NASDAQ: APP) insiders are selling shares in 2024. InsiderTrades tracks 11 insiders who sold in 2024, including numerous directors, the CEO, president, CFO, CCO, CTO, and CMO for a vegetable soup of executives. Their sales persisted into Q4 when 13 transactions were made, all sales, leaving their holdings at roughly 14%. The sales are in the face of rising share prices but pose no danger to investors. The company uses share-based compensation, and the activity aligns with that. Insiders own a considerable amount of this stock and are wise to take profits off the table regularly.
AppLovin Is Loving the Tailwind Provided by Institutions and Analysts
What is AppLovin? It is a mobile technology company that operates a cloud-based platform that connects marketers, publishers, and advertisers with their targeted audience. The company utilizes AI to assist with customer targeting and automation, helping businesses connect, convert, and monetize traffic in ways that drive value for shareholders. Users can find their audience and create ads, and there is a means for advertisers to connect with apps and targeted audiences via auction.
AppLovin’s results in 2024 include sustained high-double-digit growth, growth accelerating compared to the prior year, outperformance, revenue above $1 billion, GAAP profits, and an improving outlook. Analysts expect growth to run in the mid-twenty percent range in 2025 and for the margin to widen significantly. The longer-term outlook is for earnings to more than triple from about $4 in 2025 to over $12.30 by 2027.
There is an opportunity in the institutional trading data. The institutions have bought on balance every quarter in 2024 and own less than 60% of the stock. The opportunity is that institutional investors will continue to buy on balance, providing a tailwind for the market or even accelerating the pace and strengthening it. There is reason to believe the institutions will enhance the tailwind because of the analysts' response to the Q3 results.
What began as a trickle of revisions became a torrent when Daiwa Securities upgraded the stock to Strong Buy from Hold, a double-upgrade compounded by a significant price target increase. Analysts at the firm see executives executing well and delivering on what they promised when they launched Axon 2.0. Axon 2.0 is an upgraded version of the platform launched in 2023 and is responsible for increased revenue and profitability.
Daiwa thinks the company can sustain 20% revenue growth with just a single gaming industry and raised its price target. The price target increase is noteworthy because it is from $80 to $280, almost 50% above the prelease consensus figure, and sparked a massive round of revisions that put this stock at $400 or higher. The $400 level is 33% above the critical support target, near where AppLovin stock traded in mid-December.
AppLovin Pulls Back Into a Technical Buying Opportunity
AppLovin retreated from its high set following the Q3 release but will likely set new highs soon. The market is pulling back in a natural, healthy correction, allowing itself time to prepare for the larger move. That will likely take the stock to the $400 level and then to new all-time highs. Indicators, including MACD and stochastic, align with this outlook, showing bullish conditions and converging momentum, a sign of market strength. A move to new highs will likely trigger an inflow of new investors and potentially take the market to the analyst's high-end range near $500. Assuming the company continues to build on its success, the revision trend will continue supporting this stock in 2025, making a move above $500 possible.
