APPLOVIN CORP-CLASS A (NASDAQ:APP) – A High-Growth Momentum Stock with Strong Fundamentals and Bullish Technical Setup

Investors looking for high-growth momentum stocks with solid technical setups often search for companies showing strong earnings growth, positive analyst revisions, and improving profit margins, all while displaying good chart patterns. One stock that fits these conditions is APPLOVIN CORP-CLASS A (NASDAQ:APP), a mobile marketing and gaming company that has demonstrated strong fundamental and technical performance.

Why APP Matches the High Growth Momentum Strategy

The ChartMill High Growth Momentum Rating assesses stocks based on earnings growth, sales growth, profit margin improvements, and analyst sentiment, key factors for spotting companies with upward momentum. APP earns a 7 out of 10 on this rating, backed by:

• Strong Earnings Growth:
  • EPS growth over the past year (TTM) is 217.4%, with recent quarterly growth rates of 153.9% (last quarter), 231.3% (previous quarter), and 253.1% (two quarters ago).
  • Future estimates indicate continued growth, though slower, with next quarter’s EPS expected to rise 79.5% year-over-year.
• Revenue Growth:
  • Revenue growth (TTM) is 43.4%, with recent quarterly sales increasing by 16.5% (last quarter), 40.3% (previous quarter), and 44.0% (two quarters ago).
• Improving Profit Margins:
  • Net profit margins have risen sharply, from 10.8% two years ago to 38.8% in the latest quarter.
• Upward Analyst Revisions:
  • Next year’s EPS estimates have been raised by 22.9% over the past three months, showing improving sentiment.
• Consistent Earnings Beats:
  • APP has exceeded EPS estimates in all of the last four quarters by an average of 35.1%, reinforcing confidence in its performance.

These factors align with the CANSLIM and Minervini investing approaches, which focus on strong earnings momentum, institutional backing, and market leadership.

Technical Performance and Setup Quality

Beyond fundamentals, APP shows a strong technical structure, as outlined in its ChartMill Technical Report:

• High Technical Rating (10/10):
  • Both short-term and long-term trends are positive, with the stock trading above key moving averages (20-day, 50-day, 100-day, and 200-day SMAs).
  • Relative strength is strong, outperforming 98% of stocks over the past year and 97% of its software industry peers.
• Good Setup Rating (7/10):
  • The stock is holding near recent highs, with support levels at $375.34 and $364.12, offering clear risk management points.
  • A recent Pocket Pivot signal, a bullish volume pattern, suggests institutional buying.
  • The setup hints at a possible breakout above resistance at $417.90, with a stop-loss level just below support.

Why This Pairing Matters

High-growth momentum strategies perform best when technicals support fundamentals. A stock with strong earnings growth but weak price action may struggle to maintain gains, while one with both strong fundamentals and a bullish chart pattern has better odds of continued growth. APP’s mix of strong earnings growth, upward revisions, and a solid technical setup makes it an attractive option for momentum investors.

Find More High-Growth Momentum Opportunities

For investors seeking similar opportunities, our High Growth Momentum Breakout Setups Screen filters for stocks with strong growth metrics and favorable technical patterns.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider your risk tolerance before making investment decisions.