Investors aiming to benefit from major price increases often use a method that combines two different analytical schools: fundamental and technical analysis. The objective is to find companies with solid core business expansion—firm and growing earnings, sound finances, and high profitability—that are also nearing a possible price surge based on chart formations and momentum tools. This method tries to locate stocks where forceful business basics supply the energy, and a positive technical arrangement supplies the timing cue for a potential rise. One stock presently matching this dual description is AppLovin Corp (NASDAQ:APP).
A Base of Outstanding Fundamental Expansion
Essentially, a firm growth stock must show a quickening business path. AppLovin’s fundamental report shows a company performing very well, especially in the important area of expansion. The company receives a high ChartMill Growth Rating of 9 out of 10, which is key to the screening process as it finds companies growing faster than their competitors.
The numerical proof is strong:
- Rapid Earnings Expansion: Over the previous year, AppLovin’s Earnings Per Share (EPS) rose by 166.36%. The long-term average yearly EPS growth is a notable 84.83%.
- Firm Revenue Growth: Revenue growth is also firm, climbing 40.81% in the last year with a steady multi-year average of 36.49% each year.
- Firm Future View: Experts anticipate this pace to persist, with estimated average yearly EPS growth of 44.45% and revenue growth of 27.30% in the next few years.
This notable growth is not happening at the cost of financial soundness or effectiveness. The company holds a ChartMill Profitability Rating of 9, aided by sector-leading margins, including a Profit Margin of 51.26% and an Operating Margin of 63.35%. Also, its Financial Health Rating is a firm 8, showing a company with good liquidity and acceptable debt, able to maintain its expansion investments. You can examine the complete details of these positives in AppLovin’s fundamental analysis report.
A Technical Viewpoint Positioned for Surge
While basics explain the "why," technical analysis assists in pinpointing the "when." AppLovin’s technical report gives a complete rating of 10 out of 10, aided by a Setup Rating of 7, which particularly searches for positive chart formations before a potential move.
Important technical elements match the surge screening approach:
- Positive Trend Agreement: Both the long-term and short-term trends for APP are positive, a key requirement for surge methods which aim to follow existing momentum.
- Stabilization Close to Highs: The stock is presently trading near its 52-week high, after a time of stabilization following a large upward move. This halt can sometimes come before the next step up.
- Firm Relative Performance: APP performs better than 93% of its software sector competitors, showing that market players are already valuing its fundamental results more than its rivals.
- Clear Support and Resistance: The technical analysis finds a definite resistance level just above the present price. A clear move above this area could indicate the start of a new surge stage. The recent sighting of a "Pocket Pivot" signal—a volume-supported price move—adds another positive point on accumulation. The specific levels and setup examination are in the technical analysis report.
Valuation Considering Very Fast Growth
A typical feature of fast-growth stocks is a high valuation, and AppLovin fits this. With a Price/Earnings ratio much higher than the wider market average, the stock is clearly valued for ideal results. However, the fundamental report’s valuation score mentions balancing elements important for growth investors: a low PEG ratio, which modifies the P/E for growth, implies the high price may be reasonable given the outstanding earnings path. The excellent profitability and return measures also give a foundation for the market’s high rating. For growth-oriented methods, the main question is whether the growth can keep going to confirm and later exceed the present valuation.
Summary
AppLovin Corp offers a strong example for a merged growth and surge method. The company displays the clear, numerical growth in earnings and sales that growth investors want, supported by excellent profitability and firm financial health. At the same time, its stock chart displays the signs of a firm technical candidate: forceful relative performance, a clear and positive trend, and a stabilization formation near highs that might come before a new surge. This combination of firm fundamentals and a positive technical arrangement is exactly what the screening process tries to find.
Want to locate other stocks that fit this description of firm growth and positive technical arrangements? You can execute the same screen using our predefined "Strong Growth Stock Technical Setups" screener.
Disclaimer: This article is for information only and does not form financial guidance, a support, or a suggestion to buy, sell, or hold any security. Investing carries risk, including the possible loss of original funds. Always perform your own complete research and think about your personal financial position and risk comfort before making any investment choices.
