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AppLovin and Bumble have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – August 13, 2024 – Zacks Equity Research shares AppLovin (APP - Free Report) as the Bull of the Day and Bumble (BMBL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Robinhood Markets, Inc. (HOOD - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Interactive Brokers Group, Inc. (IBKR - Free Report) .
AppLovin is a Zack Rank #1 (Strong Buy) that specializes in mobile advertising, app monetization, and app discovery. It provides a suite of tools and services for mobile app developers to help them promote, monetize, and optimize their apps.
The stock has drawn interest from AI investors this year through its AI-powered software platform AXON. However, many are worried that the company will be unable to maintain 20% Software Platform revenue growth.
While investors have reason to be skeptical, the most recent earnings report and subsequent price action look very bullish for AppLovin.
About the Company
AppLovin was founded in 2011, has a market cap of $25 billion, and employs over 1,700.
The company operates through two segments: Software Platform and Apps. Key software solutions include AppDiscovery for matching advertiser demand with publisher supply, MAX for optimizing ad inventory value through real-time auctions, adjust for marketing analytics, and Wurl for distributing streaming video and providing advertising solutions. Other offerings include SparkLabs for app store optimization, AppLovin Exchange for connecting buyers to mobile and CTV devices, and Array for app management.
The company also runs various free-to-play mobile games.
The stock has a Zacks Style Score of "A" in Growth and Momentum. It sports a Style Score of "D" in Value, with a Forward PE of 22.
Q2 Earnings
On August 7th, AppLovin reported a 15% EPS beat and revenues came in line. Q2 earnings were $0.89, surpassing estimates of $0.77, while revenues were $1.08 billion. Q2 Adjusted EBITDA was $601 million, up 80% year-over-year, with a 56% margin.
The company provided Q3 guidance with revenue expected between $1.12 billion and $1.14 billion, exceeding the $1.09 billion estimate. Adjusted EBITDA for Q3 is projected at $630-650 million, with a margin of 57%.
Monthly Active Payers (MAPS) decreased to 1.6 million from 1.7 million year-over-year. The company also repurchased 4.2 million shares for $356 million and has $500 million remaining under its repurchase authorization.
After the numbers were released, the stock traded over 10% lower during the after-hours session. However, buyers stepped in and the stock recovered losses quickly. The stock then continued its upward momentum the next day, with the stock trading up as much as 14%.
Estimates Rising
Since reporting earnings, analysts have been significantly increasing their estimates for AppLovin.
Over the past seven days, the estimates for the current quarter have risen by 19%, from $0.75 to $0.89. For the current year, estimates have increased from $3.06 to $3.48, marking a 14% increase in the same timeframe. A similar trend is observed for next year, with estimates rising by over 17%, moving from $3.57 to $4.18.
Additionally, several firms have adjusted their price targets, with some lifting or maintaining targets above $100:
· Oppenheimer reiterated its "Outperform" rating, raising the price target to $105 from $97.
· Jefferies maintained its price target at $105.
Overall, the trend of increased price targets reflects greater optimism among analysts. The consensus is that the stock is undervalued in its core gaming ads business and has significant multiple expansion potential through eCommerce.
The Technical Take
The stock is up almost 100% in 2024, so some investors are worried about chasing this name. While this is understandable, the stock is in a bullish setup.
The recent violent sell-off in the global equity markets took APP down with it. But this allowed investors to buy the stock at the 200-day moving average. After earnings, this level was tested again and the stock bounced aggressively.
With the moving average support, the $58 level was also the 61.8% Fibonacci retracement for 2024. It is clear this level is big for the bulls and with a bounce up to the 21-day MA at $77, the stock is now looking to break support.
One big negative is that the 21-day MA is under the 50-day MA at $80. However, if the bulls can break over that resistance, then 2024 highs are likely in play. Additionally, there are Fibonacci levels above $100 that would make excellent targets for the bulls.
In Summary
AppLovin's strategic positioning in mobile advertising, backed by its AI-powered platform AXON, has attracted considerable interest in the investor community.
The sharp increase in analyst estimates and the reaffirmation of positive price targets indicate that the market is optimistic about AppLovin's future. As the company continues to capitalize on its unique offerings, it appears poised for further success in the burgeoning mobile and app development industry.
As the broader market conditions stabilize, AppLovin's blend of growth, innovation, and strategic execution may continue to drive its stock price upward, rewarding those who position themselves early.
Bumble is a Zacks Rank #5 (Strong Sell) that provides online dating and social networking platforms across North America, Europe, and internationally. As the parent company of Bumble and Badoo, two of the world's highest-grossing dating apps, Bumble allows millions of users to connect and build relationships.
The stock plunged after a recent earnings report in which the company cut its outlook. Investors likely face a rough rest of the year until the
About the Company
Bumble was founded in 2006 and is headquartered in Austin, Texas. The company runs websites and applications offering subscription and in-app purchase dating products.
Bumble is valued at just under $1 billion and has a Forward PE of 7. The stock holds Zacks Style Scores of "B" in both Growth and Value, as well as an "A" in Momentum.
Q2 Earnings
On August 7th the company posted a 47% EPS beat. This was the fourth earnings beat out of the last five quarters. However, revenues missed and the company cut its guidance.
Q3 is now seen in a range of $269-75M v the $297M expected. Bumble cut its revenue 1-2% y/y from 8-11% and dropped y/y EBIDTA margin expectations to "at least" 200bps from 300 bps.
While total paying users were up to 4.1M from 3.6M last year, Total ARPPU was $21.37 v $23.23 last year.
Management had comments on the guidance cut saying:
"We are resetting our guidance today to reflect actions we are taking to position Bumble to reignite user growth, deliver improved customer value, and drive long-term revenue growth. We believe our strong balance sheet and cash flow generation give us the flexibility we need to return capital to shareholders while creating lasting value."
Analysts Slash Estimates
Since the earnings report, analysts have started to cut their estimates and price targets.
For the current quarter, the last seven days have seen estimates reduced from $0.25 to $0.22, or 13%.
The next quarter gets worse, with numbers falling from $0.27 to $0.22, or 18%.
The current year stabilizes a bit, but next year's numbers have dropped 15%, going from $1.17 to $0.99.
Many firms lowered their price targets along with estimates after earnings.
Citigroup went to $6 from $12, RBC went from $16 to $8, and Goldman went to $9 from $18.
Technical Take
The stock dropped over 40% on the news, which is crushing for those investors that stuck with the stock since the IPO.
For now, there is a dead money situation where the stock is stuck around the $4-6 area for the time being.
Until there is some constructive action in the chart, investors should stay away. For those interested in the long-term prospects, wait for the gap to fill and, price to get over the 21-day or 50-day MA before you even consider an entry.
In Summary
Given the current challenges faced by Bumble, it's clear that the company is struggling to find its footing in a highly competitive market. Analyst sentiment has turned increasingly negative, with substantial cuts to earnings estimates and price targets from major firms, reflecting concerns about the company's ability to regain its growth trajectory. The technical outlook further reinforces this cautious stance, as the stock remains depressed following a sharp decline.
Additional content:
3 Crypto Stocks to Watch as Bitcoin Makes a Comeback
The broader market bloodbath last week also saw cryptocurrencies suffering. Bitcoin, which is trying to stage a rebound after slowing down over the past couple of months, saw prices falling below $55,000.
However, fresh economic data released last week eased some of the fears from the minds of investors, and Bitcoin is once again trying to rebound, with its price surpassing $60,000 on Aug 8.
On Aug 11, Bitcoin was hovering around $58,700. Although Bitcoin is still more than 13% down from last week, the cryptocurrency has had a bull run for most of this year after a solid 2023.
Bitcoin hit an all-time high of $73,750 on Mar 14. This year's surge gained momentum after the Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs) in January. The approval was done with the aim of helping both individual investors and large institutions to invest in Bitcoin through a regulated and accessible platform.
However, the rally stalled in April, and even the Bitcoin halving event failed to lift the price.
The halving event, which reduces the reward for mining new blocks by half to cap the total supply of Bitcoins at 21 million, typically increases demand and drives up prices. Despite this, Bitcoin saw a significant drop, with its price falling below $59,000.
The rally resumed once again in July but came to an abrupt halt last week. Bitcoin price might remain rangebound for some more time as volatility in the broader market is still far from over.
However, Bitcoin is poised to gain in the near term as the Federal Reserve is expected to start its rate cuts from September. This is likely to give Bitcoin a boost, as lower interest rates generally benefit growth-oriented assets, such as technology stocks, consumer discretionary goods and cryptocurrencies.
Stocks in Focus
We have narrowed our search to four crypto-oriented stocks that have strong potential for 2024. Each of our picks carries either a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.
Robinhood Markets, Inc. operates a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds, options, gold and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin and other cryptocurrencies using its Robinhood Crypto platform.
Robinhood Markets' expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 10.9% over the last 60 days. Robinhood Markets currently has a Zacks Rank #3.
NVIDIA Corp. is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA's focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. NVDA presently has a Zacks Rank #3.
Interactive Brokers Group, Inc. is a global automated electronic broker. IBKR executes, processes and trades in cryptocurrencies. IBKR's commodities futures trading desk also offers customers a chance to trade cryptocurrency futures.
Interactive Brokers Group has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the last 60 days. IBKR currently sports a Zacks Rank #1.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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AppLovin and Bumble have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 13, 2024 – Zacks Equity Research shares AppLovin (APP - Free Report) as the Bull of the Day and Bumble (BMBL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Robinhood Markets, Inc. (HOOD - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Interactive Brokers Group, Inc. (IBKR - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
AppLovin is a Zack Rank #1 (Strong Buy) that specializes in mobile advertising, app monetization, and app discovery. It provides a suite of tools and services for mobile app developers to help them promote, monetize, and optimize their apps.
The stock has drawn interest from AI investors this year through its AI-powered software platform AXON. However, many are worried that the company will be unable to maintain 20% Software Platform revenue growth.
While investors have reason to be skeptical, the most recent earnings report and subsequent price action look very bullish for AppLovin.
About the Company
AppLovin was founded in 2011, has a market cap of $25 billion, and employs over 1,700.
The company operates through two segments: Software Platform and Apps. Key software solutions include AppDiscovery for matching advertiser demand with publisher supply, MAX for optimizing ad inventory value through real-time auctions, adjust for marketing analytics, and Wurl for distributing streaming video and providing advertising solutions. Other offerings include SparkLabs for app store optimization, AppLovin Exchange for connecting buyers to mobile and CTV devices, and Array for app management.
The company also runs various free-to-play mobile games.
The stock has a Zacks Style Score of "A" in Growth and Momentum. It sports a Style Score of "D" in Value, with a Forward PE of 22.
Q2 Earnings
On August 7th, AppLovin reported a 15% EPS beat and revenues came in line. Q2 earnings were $0.89, surpassing estimates of $0.77, while revenues were $1.08 billion. Q2 Adjusted EBITDA was $601 million, up 80% year-over-year, with a 56% margin.
The company provided Q3 guidance with revenue expected between $1.12 billion and $1.14 billion, exceeding the $1.09 billion estimate. Adjusted EBITDA for Q3 is projected at $630-650 million, with a margin of 57%.
Monthly Active Payers (MAPS) decreased to 1.6 million from 1.7 million year-over-year. The company also repurchased 4.2 million shares for $356 million and has $500 million remaining under its repurchase authorization.
After the numbers were released, the stock traded over 10% lower during the after-hours session. However, buyers stepped in and the stock recovered losses quickly. The stock then continued its upward momentum the next day, with the stock trading up as much as 14%.
Estimates Rising
Since reporting earnings, analysts have been significantly increasing their estimates for AppLovin.
Over the past seven days, the estimates for the current quarter have risen by 19%, from $0.75 to $0.89. For the current year, estimates have increased from $3.06 to $3.48, marking a 14% increase in the same timeframe. A similar trend is observed for next year, with estimates rising by over 17%, moving from $3.57 to $4.18.
Additionally, several firms have adjusted their price targets, with some lifting or maintaining targets above $100:
· Oppenheimer reiterated its "Outperform" rating, raising the price target to $105 from $97.
· Jefferies maintained its price target at $105.
Overall, the trend of increased price targets reflects greater optimism among analysts. The consensus is that the stock is undervalued in its core gaming ads business and has significant multiple expansion potential through eCommerce.
The Technical Take
The stock is up almost 100% in 2024, so some investors are worried about chasing this name. While this is understandable, the stock is in a bullish setup.
The recent violent sell-off in the global equity markets took APP down with it. But this allowed investors to buy the stock at the 200-day moving average. After earnings, this level was tested again and the stock bounced aggressively.
With the moving average support, the $58 level was also the 61.8% Fibonacci retracement for 2024. It is clear this level is big for the bulls and with a bounce up to the 21-day MA at $77, the stock is now looking to break support.
One big negative is that the 21-day MA is under the 50-day MA at $80. However, if the bulls can break over that resistance, then 2024 highs are likely in play. Additionally, there are Fibonacci levels above $100 that would make excellent targets for the bulls.
In Summary
AppLovin's strategic positioning in mobile advertising, backed by its AI-powered platform AXON, has attracted considerable interest in the investor community.
The sharp increase in analyst estimates and the reaffirmation of positive price targets indicate that the market is optimistic about AppLovin's future. As the company continues to capitalize on its unique offerings, it appears poised for further success in the burgeoning mobile and app development industry.
As the broader market conditions stabilize, AppLovin's blend of growth, innovation, and strategic execution may continue to drive its stock price upward, rewarding those who position themselves early.
Bear of the Day:
Bumble is a Zacks Rank #5 (Strong Sell) that provides online dating and social networking platforms across North America, Europe, and internationally. As the parent company of Bumble and Badoo, two of the world's highest-grossing dating apps, Bumble allows millions of users to connect and build relationships.
The stock plunged after a recent earnings report in which the company cut its outlook. Investors likely face a rough rest of the year until the
About the Company
Bumble was founded in 2006 and is headquartered in Austin, Texas. The company runs websites and applications offering subscription and in-app purchase dating products.
Bumble is valued at just under $1 billion and has a Forward PE of 7. The stock holds Zacks Style Scores of "B" in both Growth and Value, as well as an "A" in Momentum.
Q2 Earnings
On August 7th the company posted a 47% EPS beat. This was the fourth earnings beat out of the last five quarters. However, revenues missed and the company cut its guidance.
Q3 is now seen in a range of $269-75M v the $297M expected. Bumble cut its revenue 1-2% y/y from 8-11% and dropped y/y EBIDTA margin expectations to "at least" 200bps from 300 bps.
While total paying users were up to 4.1M from 3.6M last year, Total ARPPU was $21.37 v $23.23 last year.
Management had comments on the guidance cut saying:
"We are resetting our guidance today to reflect actions we are taking to position Bumble to reignite user growth, deliver improved customer value, and drive long-term revenue growth. We believe our strong balance sheet and cash flow generation give us the flexibility we need to return capital to shareholders while creating lasting value."
Analysts Slash Estimates
Since the earnings report, analysts have started to cut their estimates and price targets.
For the current quarter, the last seven days have seen estimates reduced from $0.25 to $0.22, or 13%.
The next quarter gets worse, with numbers falling from $0.27 to $0.22, or 18%.
The current year stabilizes a bit, but next year's numbers have dropped 15%, going from $1.17 to $0.99.
Many firms lowered their price targets along with estimates after earnings.
Citigroup went to $6 from $12, RBC went from $16 to $8, and Goldman went to $9 from $18.
Technical Take
The stock dropped over 40% on the news, which is crushing for those investors that stuck with the stock since the IPO.
For now, there is a dead money situation where the stock is stuck around the $4-6 area for the time being.
Until there is some constructive action in the chart, investors should stay away. For those interested in the long-term prospects, wait for the gap to fill and, price to get over the 21-day or 50-day MA before you even consider an entry.
In Summary
Given the current challenges faced by Bumble, it's clear that the company is struggling to find its footing in a highly competitive market. Analyst sentiment has turned increasingly negative, with substantial cuts to earnings estimates and price targets from major firms, reflecting concerns about the company's ability to regain its growth trajectory. The technical outlook further reinforces this cautious stance, as the stock remains depressed following a sharp decline.
Additional content:
3 Crypto Stocks to Watch as Bitcoin Makes a Comeback
The broader market bloodbath last week also saw cryptocurrencies suffering. Bitcoin, which is trying to stage a rebound after slowing down over the past couple of months, saw prices falling below $55,000.
However, fresh economic data released last week eased some of the fears from the minds of investors, and Bitcoin is once again trying to rebound, with its price surpassing $60,000 on Aug 8.
On Aug 11, Bitcoin was hovering around $58,700. Although Bitcoin is still more than 13% down from last week, the cryptocurrency has had a bull run for most of this year after a solid 2023.
Bitcoin hit an all-time high of $73,750 on Mar 14. This year's surge gained momentum after the Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs) in January. The approval was done with the aim of helping both individual investors and large institutions to invest in Bitcoin through a regulated and accessible platform.
However, the rally stalled in April, and even the Bitcoin halving event failed to lift the price.
The halving event, which reduces the reward for mining new blocks by half to cap the total supply of Bitcoins at 21 million, typically increases demand and drives up prices. Despite this, Bitcoin saw a significant drop, with its price falling below $59,000.
The rally resumed once again in July but came to an abrupt halt last week. Bitcoin price might remain rangebound for some more time as volatility in the broader market is still far from over.
However, Bitcoin is poised to gain in the near term as the Federal Reserve is expected to start its rate cuts from September. This is likely to give Bitcoin a boost, as lower interest rates generally benefit growth-oriented assets, such as technology stocks, consumer discretionary goods and cryptocurrencies.
Stocks in Focus
We have narrowed our search to four crypto-oriented stocks that have strong potential for 2024. Each of our picks carries either a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.
Robinhood Markets, Inc. operates a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds, options, gold and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin and other cryptocurrencies using its Robinhood Crypto platform.
Robinhood Markets' expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 10.9% over the last 60 days. Robinhood Markets currently has a Zacks Rank #3.
NVIDIA Corp. is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA's focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. NVDA presently has a Zacks Rank #3.
Interactive Brokers Group, Inc. is a global automated electronic broker. IBKR executes, processes and trades in cryptocurrencies. IBKR's commodities futures trading desk also offers customers a chance to trade cryptocurrency futures.
Interactive Brokers Group has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the last 60 days. IBKR currently sports a Zacks Rank #1.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
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https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.