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The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at $3.94, indicating 60.8% growth from the year-ago reported quarter. The consensus estimate for revenues stands at $2.08 billion, implying 47.8% year-over-year growth. There have been three downward revisions to analyst estimates in the past 30 days versus no upward revisions.
Image Source: Zacks Investment Research
The company has a strong history of earnings surprises. Earnings surpassed the Zacks Consensus Estimate in all four trailing quarters, with an average earnings surprise of 5.3%.
Q3 Earnings Beat Not Likely for APP
Our proven model doesn’t conclusively predict an earnings beat for APP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
APP has an Earnings ESP of +1.45% and a Zacks Rank #4 (Sell).
The stock has plunged 64% over the past year compared with the broader industry's 32% decline, and the sell-off has lowered valuations. ARM trades at a forward 12-month price-to-earnings multiple of 11.98X, below the industry average of 17.74X. It trades at a forward 12-month price-to-sales multiple of 2.35X, below the industry average of 7.9X, suggesting the stock remains from expensive.
Image Source: Zacks Investment Research
APP Is a Sell Ahead of Q3 Earnings
AppLovin’s impressive history of earnings surprises and strong growth expectations are not enough to justify buying the stock ahead of its upcoming results. Downward estimate revisions signal weakening analyst confidence, while its Zacks Rank #4 (Sell) and positive Earnings ESP fail to provide a convincing earnings beat signal. The stock’s steep decline over the past year highlights persistent investor concerns, even as valuations appear more attractive. With uncertainty surrounding its near-term earnings performance, the risk-reward balance remains unfavorable. Investors should avoid chasing APP until estimate revisions improve and analyst sentiment turns more favorable.
How AppLovin Compares With Key Peers
The Trade Desk (TTD - Free Report) operates a programmatic advertising platform serving advertisers across multiple digital channels. The Trade Desk benefits from diversified advertising exposure, although its performance remains sensitive to marketing expenditure trends. Compared with AppLovin's emphasis on performance-driven mobile advertising, The Trade Desk offers broader exposure to digital advertising demand.
Unity Software (U - Free Report) represents another relevant competitor through its advertising monetization and game-development technologies. Unity Software competes for mobile advertising budgets while maintaining commercial connections within the broader developer ecosystem. Although Unity Software faces its own profitability and execution challenges, its expanding advertising capabilities could intensify competitive pressure on AppLovin.
View the Zacks #1 Rank List
Image: Bigstock
Should AppLovin Stock Be in Your Portfolio Before Q3 Earnings?
Key Takeaways
AppLovin Corporation (APP - Free Report) will report its third-quarter 2026 results on Nov. 4, after the bell.
The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at $3.94, indicating 60.8% growth from the year-ago reported quarter. The consensus estimate for revenues stands at $2.08 billion, implying 47.8% year-over-year growth. There have been three downward revisions to analyst estimates in the past 30 days versus no upward revisions.
The company has a strong history of earnings surprises. Earnings surpassed the Zacks Consensus Estimate in all four trailing quarters, with an average earnings surprise of 5.3%.
Q3 Earnings Beat Not Likely for APP
Our proven model doesn’t conclusively predict an earnings beat for APP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
APP has an Earnings ESP of +1.45% and a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
APP’s Price Dynamics and Valuation
The stock has plunged 64% over the past year compared with the broader industry's 32% decline, and the sell-off has lowered valuations. ARM trades at a forward 12-month price-to-earnings multiple of 11.98X, below the industry average of 17.74X. It trades at a forward 12-month price-to-sales multiple of 2.35X, below the industry average of 7.9X, suggesting the stock remains from expensive.
Image Source: Zacks Investment Research
APP Is a Sell Ahead of Q3 Earnings
AppLovin’s impressive history of earnings surprises and strong growth expectations are not enough to justify buying the stock ahead of its upcoming results. Downward estimate revisions signal weakening analyst confidence, while its Zacks Rank #4 (Sell) and positive Earnings ESP fail to provide a convincing earnings beat signal. The stock’s steep decline over the past year highlights persistent investor concerns, even as valuations appear more attractive. With uncertainty surrounding its near-term earnings performance, the risk-reward balance remains unfavorable. Investors should avoid chasing APP until estimate revisions improve and analyst sentiment turns more favorable.
How AppLovin Compares With Key Peers
The Trade Desk (TTD - Free Report) operates a programmatic advertising platform serving advertisers across multiple digital channels. The Trade Desk benefits from diversified advertising exposure, although its performance remains sensitive to marketing expenditure trends. Compared with AppLovin's emphasis on performance-driven mobile advertising, The Trade Desk offers broader exposure to digital advertising demand.
Unity Software (U - Free Report) represents another relevant competitor through its advertising monetization and game-development technologies. Unity Software competes for mobile advertising budgets while maintaining commercial connections within the broader developer ecosystem. Although Unity Software faces its own profitability and execution challenges, its expanding advertising capabilities could intensify competitive pressure on AppLovin.