Applovin earnings report is coming! How to play options strategy?
Applovin will release its financial report after the market closes on February 12, Eastern Time. According to the latest forecast of analysts, Applovin is expected to achieve revenue of US $1.264 billion in Q4 2024, a year-on-year increase of 32.58%; Earnings per share are expected to be $1.26, a year-on-year increase of 156.71%.
As Wall Street's "new favorite of AI",$AppLovin Corporation (APP) $Last year, the cumulative increase reached an astonishing 712%, making it the best-performing technology stock in 2024. This year, it has continued to rise, and there is still a gratifying increase of nearly 18% since the beginning of the year. The latest market value has also soared to US $127.7 billion in one fell swoop, surpassing $, $and $.
Looking back at the last quarter, Applovin reported strong quarterly results. The company earned $1.25 per share in Q3, easily exceeding Wall Street consensus estimates, while revenue was nearly $1.2 billion, a huge increase of 39% from the previous quarter. It is worth noting thatDriven by last quarter's performance that exceeded expectations and the AI boom, the stock soared 46% on the day after the results.
Looking forward to this performance, investors are still focusing onSoftware Platforms and ApplicationsIn terms of these two core businesses, judging from the results of the previous quarter, among themSoftware platform revenue accounts for as much as 70% of total revenue。 Furthermore,The development momentum of AI-driven advertising engine optimization and the growth space of market size are also the key points of Applovin's subsequent development potential.
Specifically, according to Bloomberg's consensus expectations,In the fourth quarter, Applovin software platform revenue was US $890 million, a year-on-year increase of 54.73% and a quarter-on-quarter increase of 6.8%; Application revenue was US $370 million, a year-on-year decrease of 1.85% and a slight increase of 1.9% month-on-month.
Institutional pre-performance collectively bullish
Despite$Applovin (APP.US)$The valuation is high enough, but in the eyes of some analysts who are bullish on Applovin's share price, the company is still worth buying. Jefferies even named it the "best investment" in 2025 and raised its target price to $425.
Loop Capital analysts believe Applovin will once again be one of the better-performing growth stocks in 2025 and have raised its price target to $450 from $385. The bank pointed out that Applovin's core gaming business has grown significantly, with a three-year compound annual growth rate of 63%, which justifies its stock price. In addition to gaming, Loop believes direct-to-consumer advertising can also deliver rapid revenue growth. Loop also believes that it is only a matter of time before Applovin is included in the standard 500 list, because its market value has exceeded $100 billion.
How has the stock price performed on previous earnings days?
Currently, Applovin's implied change is ± 19.1%, indicating that the options market has bet on its single-day rise and fall of 19.1% after its performance; In comparison, Applovin's post-performance average stock price change in the first four quarters was ± 14. 8%, indicating that the current option value of the stock is overvalued.
What options strategy is used to bet on financial reports?
If investors are bullish on the APP, they can use the bull market call spread strategy to go long on the APP. The specific operation is to buy a call option with an exercise price of 382.5, which costs $3,685 premium.
The second step is to sell the call option with an exercise price of 420 to obtain premium premium of $2,209.
Buy a call option with a strike price of $382.5, costing $3,685.
Sell the call option with a strike price of $420 and get $2,209.
Net expenditure (initial cost) = $3,685-$2,209 = $1,476.
Maximum benefit = ($420-$382.5) × 100-Initial cost = $$3,750-$$1,476 = $2,274.
Maximum loss = initial cost $1,476.
Breakeven = 382.5 + (1,476 ÷ 100) = $397.26.
PROFIT AND LOSS
When the stock price is ≤ $382.5, the strategy losses the most, which is-$1,476.
When share price = $397.26, profit and loss are flat.
When $$397.26 & lt; Stock price & lt; At $$420, the strategy is profitable, but it has not reached its maximum yield.
When the stock price is ≥ $420, the strategy gets the maximum return of $2,274.
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