AppLovin Corporation (APP) Hits Fresh High: Is There Still Room to Run?

Shares of AppLovin (APP) have been strong performers lately, with the stock up 42.1% over the past month. The stock hit a new 52-week high of $525.15 in the previous session. AppLovin has gained 45.7% since the start of the year compared to the 12.7% move for the Zacks Business Services sector and the 28.1% return for the Zacks Technology Services industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 12, 2025, AppLovin reported EPS of $1.73 versus consensus estimate of $1.34 while it beat the consensus revenue estimate by 8.62%.For the current fiscal year, AppLovin is expected to post earnings of $6.16 per share on $5.66 billion in revenues. This represents a 35.98% change in EPS on a 20.29% change in revenues. For the next fiscal year, the company is expected to earn $7.81 per share on $6.75 billion in revenues. This represents a year-over-year change of 26.8% and 19.24%, respectively.Valuation MetricsAppLovin may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.AppLovin has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.In terms of its value breakdown, the stock currently trades at 76.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 24.7X. On a trailing cash flow basis, the stock currently trades at 187.9X versus its peer group's average of 13.6X. Additionally, the stock has a PEG ratio of 3.83. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, AppLovin currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if AppLovin meets the list of requirements. Thus, it seems as though AppLovin shares could have a bit more room to run in the near term.How Does APP Stack Up to the Competition?Shares of APP have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Priority Technology Holdings, Inc. (PRTH). PRTH has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of D.Earnings were strong last quarter. Priority Technology Holdings, Inc. beat our consensus estimate by 240%, and for the current fiscal year, PRTH is expected to post earnings of $0.76 per share on revenue of $878.82 million.Shares of Priority Technology Holdings, Inc. have gained 28.5% over the past month, and currently trade at a forward P/E of 14.65X and a P/CF of 12.04X.The Technology Services industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for APP and PRTH, even beyond their own solid fundamental situation.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AppLovin Corporation (APP): Free Stock Analysis Report Priority Technology Holdings, Inc. (PRTH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks