AppLovin Stock Tumbles After Edgewater Research Cuts Estimates Citing Rising Competition

Shares of AppLovin (APP) pared some of the losses after tumbling 11% on Wednesday morning after Edgewater Research lowered its estimates for the company, citing rising competition and a decelerating mobile gaming environment.

Edgewater stated that the mobile gaming macro environment "seems to be decelerating slowly," while competition from both Meta (META) and Alphabet (GOOG) is rising, as per TheFly.

AppLovin's user acquisition performance and back-end impression share are both seen as stable at industry-leading levels, versus "rapidly expanding" previously, the firm told investors in a research note.

Edgewater cut estimates for video game software development company Unity Software Inc., in addition to AppLovin. Unity shares declined by 6% on Wednesday morning.

AppLovin provides end-to-end software and AI solutions for businesses to reach, monetize, and
grow their global audiences. It also offers services and technologies for mobile app developers, including game development.

For the full year 2024, AppLovin reported total revenue of $4.71 billion, representing a 43% increase from 2023, driven by a 75% surge in advertising revenue.

Net income for the year came in at $1.58 billion, marking a growth of 343% from 2023.

Unity, meanwhile, reported a drop in revenue to $1.81 billion in 2024, down from $2.19 billion in 2023.

Net loss for the year, however, narrowed to $664 million in 2024 compared to $826 million in the full year 2023.

APP stock is down by about 21% this year but up by over 281% over the past 12 months.

Also See: Regulus Therapeutics Stock Skyrockets On $1.7B Acquisition Offer From Novartis

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