Will Strong TASER Demand Continue to Guide Axon's Connected Devices Unit?
Axon Enterprise, Inc. AXON is expanding its footprint in the public safety technology space, with the Connected Devices segment playing an important role in overall growth. In the first quarter of 2025, the segment's revenues surged 26.1% year over year, reflecting strong momentum across its product lines.The ongoing demand for TASER devices is the core component of the segment's success. AXON continues to benefit from the rising popularity of its next-generation TASER 10 products, which began shipping in 2023. Revenues from TASER devices increased $30.9 million year over year in the first quarter, driven by the higher volume of TASER 10 handles and cartridges.Solid demand for virtual reality training services and counter drone equipment continues to support the segment's growth. Axon launched the next-generation body-worn camera, Axon Body 4, in April 2023, which has added momentum as well. Equipped with enhanced features such as a bi-directional communication facility and a point-of-view camera module option, the product is generating strong customer demand, thus bolstering the segment's growth. The Connected Devices unit is also benefiting from increased warranty revenues from a higher volume of deployed devices in the field.With rising global security concerns, including increasing instances of terrorism and criminal activities, demand for advanced public safety technologies is expected to remain strong. These trends are likely to support the ongoing demand for Axon's Connected Devices portfolio, positioning the segment well for sustained momentum in the quarters ahead.
Among its major peers, Kratos Defense & Security Solutions, Inc.'s KTOS Kratos Government Solutions segment reported net revenues of $239.5 million in the first quarter of 2025, increasing 10% on a year-over-year basis. Kratos generated 79.1% of its total revenues from this segment in the quarter. The revenue improvement for Kratos' segment can be attributed to notable growth in its C5ISR, Defense Rocket Support and Microwave Products businesses.Teledyne Technologies Incorporated's TDY Digital Imaging segment's first-quarter 2025 revenues increased 2.2% year over year to $757 million. This was driven by higher sales of Teledyne's commercial infrared imaging components and surveillance systems. Teledyne derived 52.2% of its total revenues from this segment during the quarter.
Shares of Axon have surged 165.2% in the past year compared with the industry's growth of 42.1%.
Image Source: Zacks Investment Research
From a valuation standpoint, AXON is trading at a forward price-to-earnings ratio of 1,156.40X above the industry's average of 46.32X. Axon carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AXON's second-quarter 2025 earnings has been on the rise over the past 60 days.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Teledyne Technologies Incorporated (TDY) : Free Stock Analysis Report
Kratos Defense & Security Solutions, Inc. (KTOS) : Free Stock Analysis Report
Axon Enterprise, Inc (AXON) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
8 hours ago
- Yahoo
2 world-class growth shares to consider buying during a stock market crash
It's always a smart idea to have a shopping list of shares at hand. This is what I had in April when the proverbial hit the fan, saving me valuable time deciding which stocks to buy when many suddenly went on sale. Two on my list were Shopify and Nvidia, and I took my chance when things quickly went south. Those positions are currently up 40% and 51% respectively since early April. Here are two shares that look overvalued, but which I think investors should consider putting on a shopping list for the next bear market or crash. The first is Axon Enterprise (NASDAQ: AXON). As well as owning the Taser brand, the company sells body-cams, dash-cams, and various software products to law enforcement customers. It's also innovating in drones, VR training, and powerful artificial intelligence (AI)-powered tools. Last year, revenue jumped 33% to $2.1bn, up from $681m in 2020. Over $1bn of that is now annual recurring revenue, while total future contracted bookings rose to $10.1bn. The company continues to scale up very impressively. This rapid progress is reflected in the share price, which has vaulted 700% in three years. The key risk now then is valuation, with the shares trading at 27 times sales. If Axon's growth underwhelms, the stock could sell off heavily. But I think this is definitely one to consider picking up during any such sell-off. The enterprise growth opportunity's very large. Take body-cams, for example. In an attempt to reduce attacks on staff, Walmart's piloting black-and-yellow body-cams in some stores (Axon's signature colours). Management points out that Walmart has 2.1m retail workers, far in excess of the 900,000 cops in the US. What about airlines? Cabin crew are no strangers to abusive behaviour. Cameras can provide evidence, reduce false claims, and deter aggression. They would integrate with Axon's cloud-based evidence system, adding to the recurring revenue. Meanwhile, the company's sitting on a library of video data that's roughly 40 times larger than that belonging to Netflix (NASDAQ: NFLX). Axon's using this vast data trove to train AI models and power a growing suite of tools, embedding it ever deeper into customers' daily workflows. Looking ahead, the international opportunity in Europe, Latin America and Asia remains largely untapped. Returning to Netflix, I think the global streaming leader is worthy of consideration. But perhaps not right now around $1,220. This price puts the stock at 13 times sales and 49 times forward earnings. Again, this stretched valuation leaves very little margin for error, particularly if subscriber growth unexpectantly slows. Long term though, I'm bullish on Netflix. The firm possesses an incredible brand and streaming still has plenty of room to grow globally. It also offers fantastic value for money. At £12.99, my Netflix subscription's probably one of the last discretionary things I would cut. The new ad-supported tier is just £5.99 a month — less than the price of a pint in London nowadays! I think Netflix can keep increasing prices for years without losing too many subscribers. The firm has set a goal of reaching a $1trn market-cap by 2030, up from $520bn today. I think that's achievable, especially if cutting-edge generative AI helps it make content for less money. The post 2 world-class growth shares to consider buying during a stock market crash appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Ben McPoland has positions in Axon Enterprise, Nvidia, and Shopify. The Motley Fool UK has recommended Axon Enterprise, Nvidia, Shopify, and Walmart. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
14 hours ago
- Yahoo
Mild US Inflation Is Backdrop for Fed's Powell on the Hill
(Bloomberg) -- US inflation probably inched higher in May, offering scant evidence of extensive tariff-related repercussions that the Federal Reserve expects to become more apparent later in the year. One Architect's Quest to Save Mumbai's Heritage From Disappearing Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown Ahead of the key figures on Friday and fresh off the Fed's decision this week to keep interest rates unchanged, Jerome Powell heads to Capitol Hill for two days of testimony in which he'll lay out the case, again, for the central bank's go-slow policy approach. The Fed chair is likely to emphasize that while rate cuts are possible this year, officials want more clarity on the economic impact of White House trade policy. Economists see the personal consumption expenditures price index excluding food and energy — the Fed's preferred gauge of underlying inflation — rising 0.1% in May for a third month. That would mark the tamest three-month stretch since the pandemic five years ago. US central bankers largely see the Trump administration's expanded use of tariffs putting upward pressure on prices, eventually. But their latest economic forecasts also show officials see weaker economic growth and higher unemployment this year. Fed Governor Christopher Waller on Friday told CNBC that the inflation hit from import duties is likely to be short-lived, and he sees room to resume lowering borrowing costs as soon as next month. The Fed's next policy decision will come on July 30. What Bloomberg Economics Says: 'The Fed's preferred gauge, core PCE inflation, likely rose just 2 basis points in May, a modest uptick that will offer little clarity about upside risks to inflation in coming months. That's likely to leave some Fed officials still balancing the two sides of its mandate, rather than shifting focus to upside inflation risks.' — Estelle Ou, Anna Wong, Stuart Paul, Eliza Winger and Chris G. Collins, economists. For full analysis, click here Along with the May inflation data, the government's report on Friday is projected to show a second month of modest growth in household spending on goods and services. The last two months included a steep downturn in sentiment, related in part to heightened anxiety about the possible impact on prices from higher tariffs. Economists will also look to the report's personal income data to gauge the ability of consumers to continue spending. In the three months through April, inflation-adjusted disposable income growth averaged 0.6%, the strongest in more than two years. Other US data in the coming week includes May existing- and new-home sales, as well as two surveys of June consumer confidence. On Thursday, the government will issue its advance economic indicators report that includes an initial estimate of the merchandise trade deficit for May. In addition to Powell delivering the Fed's semi-annual policy report — he testifies to a House panel on Tuesday and the Senate Banking Committee on Wednesday — a slew of other central bankers, including New York Fed President John Williams, hit the public speaking circuit. For more, read Bloomberg Economics' full Week Ahead for the US Further north, Statistics Canada will release the first of two inflation prints before the Bank of Canada's July rate decision. Policymakers are closely watching firmer-than-expected core inflation and have signaled they'll remain on hold unless underlying price pressures ease. Industry-based gross domestic product data for April and a flash estimate for May are likely to show a pullback in exports and business investment as Trump's tariffs took hold. Elsewhere, multiple inflation releases in Asia, appearances by the euro-zone and UK central bank chiefs, and a prospective rate cut in Mexico may be among the highlights. Click here for what happened in the past week, and below is our wrap of what's coming up in the global economy. Asia It's a data-heavy week in Asia, with inflation figures due from four economies as well as fresh reads on industrial output, trade and consumer demand. For investors navigating geopolitical flare-ups and a fragmenting trade environment, the week's releases will offer timely clues about inflation persistence, consumer strength, and industrial momentum across Asia's most influential economies. Price prints from Singapore, Malaysia and Australia will help guide central banks as they tread cautiously on rate decisions. Singapore reports CPI on Monday, followed by Malaysia on Tuesday and Australia on Wednesday. Tokyo CPI — a leading indicator for Japan's nationwide gauge of prices — is due Friday. Beyond inflation, the slate offers insight into how Asia's trade-driven economies are faring amid global demand shifts. Early in the week, Australia, India and Japan report purchasing manager indexes, while South Korea releases confidence and sentiment surveys, along with exports and retail sales. Singapore's May industrial production data, due on Thursday, will help shed some light on domestic resilience. China publishes industrial profits on Friday, giving investors a read on margin recovery as the economy adjusts to trade frictions and a still-weak property sector. With stimulus measures limited and external demand cooling, Beijing is leaning on targeted support to maintain growth near its official target. Japan will report retail sales and the jobless rate Friday, which together with Tokyo CPI will help inform the Bank of Japan's next policy moves. The BOJ just left rates unchanged and unveiled a plan to step back from the bond market at a slower pace from next year. Thailand's central bank is expected to hold its key rate steady on Tuesday, with car sales and manufacturing data rounding out its domestic picture. The decision comes amid domestic political upheaval after the second-largest party in Thai Prime Minister Paetongtarn Shinawatra's government quit the ruling coalition, an outcome that may concern foreign investors who've dumped a net $2.3 billion of Thai stocks this year. For more, read Bloomberg Economics' full Week Ahead for Asia Europe, Middle East, Africa Business surveys and testimony by central bankers are among the highlights in the euro zone and the UK this week. The flash PMIs for June, due on Monday, will point to whether manufacturing and services are weathering the uncertainty posed by US tariff policies. Germany's Ifo gauge of business sentiment comes the following day, revealing how companies in the region's biggest economy are faring with trade stress in the initial months of Friedrich Merz's term as chancellor. Meanwhile, inflation numbers for France and Spain — the first major readings for June — are due on Friday. European Central Bank President Christine Lagarde will speak in the European Parliament on Monday, and a dozen or so other appearances by euro-area policymakers are on the calendar. Bank of England officials will also be out in force, with more than 10 appearances on the agenda. Among them, Governor Andrew Bailey will testify on Tuesday to the House of Lords, parliament's upper house. Views on a dramatic drop in UK retail sales may be eagerly awaited by investors. In Sweden, the Riksbank will release minutes of its decision to resume its rate-cutting cycle. Bulgaria's application to join the euro may advance on Thursday, with European Union leaders set to approve convergence reports on the country's readiness to adopt the currency. Ukraine's statisticians will release first-quarter growth numbers during the week. The South African Reserve Bank will publish its quarterly bulletin on Thursday, providing data on household debt and shedding light on whether the government achieved its first back-to-back primary surplus since 2008-09. For more, read Bloomberg Economics' full Week Ahead for EMEA Some monetary decisions are also on the calendar: With an inflation rate that's way below the central bank's target for 2025, Moroccan officials will most likely cut borrowing costs by 25 basis points on Tuesday to boost financing for an investment spree led by preparations to co-host the FIFA World Cup in 2030. The same day, Hungary's central bank is poised to keep its key rate unchanged for a ninth month due to inflation and geopolitical risks. Czech policymakers, in a decision on Wednesday, are likely to keep borrowing costs unchanged. Latin America Argentina's output report on Monday is likely to show that the economy expanded for a third straight quarter in the three months through March. Most analysts see faster growth through mid-year, and the consensus puts 2025's expansion at 5%. Analysts expect Mexico's mid-month inflation rate to have slowed, paving the way for Banxico's eighth straight rate cut Thursday. Also due from Latin America's No. 2 economy are retail sales, jobs data and the April GDP-proxy reading. Brazil's central bank on Tuesday posts the minutes of its June rate meeting. The BCB delivered a seventh straight hike, to 15%, and signaled that borrowing costs will likely remain steady for a long period. Brazil watchers can also look forward to the central bank's quarterly monetary policy report, national unemployment data and mid-month consumer prices data, along with a reading of the country's broadest measure of inflation. Colombia's central bankers meeting on Friday may see a bit of daylight for a second straight cut as May consumer prices data were better than expected, but the early call from analysts is for a hold at 9.25% In Paraguay, the central bank isn't expected to tinker with its 6% policy rate on Tuesday, even after May inflation slowed to 3.6%. For more, read Bloomberg Economics' full Week Ahead for Latin America --With assistance from Swati Pandey, Mark Evans, Laura Dhillon Kane, Monique Vanek, Robert Jameson, Ros Krasny and Souhail Karam. Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P.
Yahoo
a day ago
- Yahoo
AppLovin: The advertising giant in the making
Introduction AppLovin is a premier mobile technology company that has transitioned from a mobile gaming developer to a full-fledged app marketing and monetization platform. It was established in 2012 and is based in Palo Alto, California. The company operates two main business units: Software Platform and Apps. The Software Platform, which is driven by the AI-based AXON engine, is aimed at mobile app developers and it provides them with cutting-edge solutions like user acquisition, monetization, and analytics. This platform is responsible for handling billions of ad requests on a daily basis, as it leverages machine learning algorithms to improve campaign performance and to increase revenue for both advertisers and publishers. Among the key products offered are the MAX mediation platform which is the instrument that allows publishers to operate several ad networks with a single integration, and thorough user acquisition tools that are specifically designed for developers to grow their user bases at the shortest time possible. Warning! GuruFocus has detected 3 Warning Sign with APP. Key Growth Drivers Machine Learning and AI-Powered Optimization The AXON platform that is powered by AppLovin's sophisticated machine learning infrastructure, which is its own product, is the genetic code of the tech advantage of the company. The proprietary AI engine that the company uses, being at the heart of the whole process, is in charge of the incredible computational task of processing a diverse range of data to make real-time decisions on the best ad placements, user acquisition campaigns, and monetization strategies available. By examining the engagement metrics and conversion data, the system constantly improves the targeting accuracy and campaign efficiency besides getting insight from user behavior patterns. This exceptional efficiency, which allows advertisers to make more informed bids on ad inventory while publishers to generate more revenue, is based on the system's predictive capabilities. The platform's establishment to process and learn from billions of pieces of data each day creates a significant barrier for other competitors, as it is developed better with more available data. AXON is the neural network that drives the whole platform with deep learning technology, which is used to explore the user data in a way that traditional analysis tools would not be able to. That is to say, this platform is the most modern digital solution that performs the task of reinforcement learning, where the smart algorithms are given real-time feedback with optimal ad placement and bidding decisions generated automatically. This automated optimization function, which in reality results in the use of less human resources, is achieved compared to the delivering of impressive results using a set of predefined rules. Real-Time Bidding and Programmatic Infrastructure AppLovin has the technology stack including high-performance real-time bidding (RTB) infrastructure capable of processing hundreds of thousands of bid requests per second with sub-100 millisecond response times. This is a low-latency system for mobile advertising where split-second decisions are the determinants of campaign success. The distributed architecture of the platform ensures global scalability and uniform performance, despite different geographic regions. Moreover, the programmatic advertising technology platform includes header bidding alongside the integration allowing publishers to increase their revenue through enabling multi-demand sources to compete for the same inventory simultaneously. The system's complex auction mechanics are not only concerned with bid prices but also take into account user experience, ad quality, and long-term value optimization. However, Applovin's server-side integration mechanisms spare the technical brunt of application developers while presenting centralized data collection and analysis techniques. This approach is compared to client-side implementations, which need multiple SDK integrations, resulting in longer app latency and poor user experience. Data Analytics and Attribution Technology The advanced data analytics structure of the company processes the huge amounts of data it collects to find insights that are valuable for both the advertisers and publishers. More advanced attribution models, in turn, allow for better measurement of the user paths across multiple touchpoints, which translates into higher confidence in the budget allocation decisions. The two ways to attribute the platform's capability are probabilistic and deterministic, which are useful for a much dense privacy environment. AppLovin's analytics tool provides sophisticated analysis of cohorts, predicting lifetime value, and churn modeling to the app developers in an effort to enhance the user acquisition process. The platform's ability to connect the costs of acquiring new users with the value they bring over time means it can help optimize return on ad investment (ROAS) more than measuring just installs can. The company's commitment to using privacy-friendly methods in data collection and analysis ensures that it is well-prepared for the ever-changing legal landscape. Data confidentiality and federated learning methods, together with innovative approaches in data collection, will facilitate users' right to privacy, and continue the optimization process by respecting regulatory mandates. Competition from Technology Giants AppLovin is up against robust competition from technology companies that are using their resources and networks. Google, through its AdMob platform and Google Ads ecosystem, is probably the strongest rival. Google's interconnectedness with Android, YouTube, and its advertising network turned it into a powerhouse that promises premium exposure and fine contracts. Facebook (Meta), through its Audience Network along with the vast amount of data from social media, which makes it possible for precise user targeting and cross-platform campaign management, is another relevant competitor. Apple's recent privacy policies, namely, App Tracking Transparency (ATT), are a mixed-source benefit in the competition scene. The fact is that these issues eliminate some of the attribution and targeting capabilities for a while but at the same time, that would bring balance to the situation by lessening the data advantages that some of the competitors had before. The way to deal with this threat is a concentration on those areas where the giants might not be as swift or/and comprehensive. The deep dive on the mobile gaming and app monetization areas by the company grants the right for more in-depth verticals and exactly tailor-made solutions rather than platform companies do. The optimization brought along with the AXON platform's automatic algorithms for the mobile app environment often results in better performance than generic ad solvers in the scope of new user quality and monetization efficiency. Competition from Specialist Ad Tech Companies The mobile advertising game is competitive with the participation of many niche players, each of whom has identified a particular slice of the market. Unity Technologies is one of them, in particular, because it uses its Unity Ads platform to operate in the same arena as mobile gaming ads and even leverage its game development engine to provide integrated advertising. IronSource (now part of Unity) used to be a significant adversary with its all-in-one platform that handled app monetization and user acquisition comprehensively. Chartboost has a very specific operation model that enables it to focus only on mobile game advertising, which includes direct publisher relationships and extensive knowledge of the gaming industry. Vungle (now part of Liftoff) is a firm that, through its video ad solutions, has added strong creative optimization capabilities. These companies are mostly known for their vibrant industry knowledge and long-standing partnerships defined within the industry sectors. However, these specialized players are giving a tough time with their niche focus, AppLovin is competing against them by bringing extra scale and high-level technology. The yield of billions and billions of ad requests daily makes the company to have the capacity of more effective machine learning optimizationin and standard machine learning schemes. AppLovin's user acquisition, monetization, and analytics in one solution platform and the simplicity of not having to carry out multiple integrations delivers accessibility and effectiveness over single point solutions that require integrations. Strengthened by the right acquisitions, the company is in a stronger position as it has consolidated its market share, and the potential competition was eliminated. The MoPub acquisition from Twitter gave AppLovin a digital publisher relationship and mediation capabilities while other small acquisitions enriched the tech stack and human resources, thus enhancing the platform. Key Risks Risks of Platform Dependency and Ecosystem Control AppLovin is at a high risk concerning the technological factors stemming from its reliance on mobile platforms governed by Apple and Google. Any iOS and Android platform policy changes can, in a matter of seconds, thus alter the way AppLovin operates. The real-time impact of the implementation of Apple's App Tracking Transparency (ATT) framework proved this vulnerability when mobile advertisers immediately lost the ability to accurately attribute and target their ads. The prospective platform issues may involve more rigorous SDK approval processes, more privacy restrictions, or modified app store policies that will limit the advertising functionality altogether. For instance, the introduction of Private Relay in iOS 17 and the addition of enhanced tracking protection greatly narrow data collection capabilities. Although the Privacy Sandbox initiative from Android is still in progress, it poses a serious risk of redefining the way mobile advertising attribution and targeting are done. The technical risk branch out to the potential scenarios of platform fragmentation in which different versions of iOS or Android impose different privacy and advertising restrictions. AppLovin's single platform strategy is rendered more complex as it needs to reconcile with the different technical requirements caused by the braid of platform versions and geographic regions with various regulatory frameworks. Algorithmic and Machine Learning Model Vulnerabilities AXON's machine learning algorithms are the backbone of AppLovin's business edge as they grant a strongly concentrated technical risk around model performance and accuracy. The susceptibility of machine learning models to concept drift, where changing user behavior patterns or market conditions reduce the effectiveness of the model over time, is one of the most common reasons for this fall. The constant mutation of the mobile advertising ecosystem can make the previously useful alphas to be of no use whatsoever. Model bias is another highlight technical risk, this is when the algorithms inadvertently discriminate against some user segments or app categories, which in turn could result in regulatory violations or suboptimal performance outcomes. Attacks that are deceitful to the machine learning systems could influence either the bidding algorithms or the attribution models, which will in turn lead to financial losses and site degradation. The scenario of being data poisoned where the hackers introduce the useless and malicious data into the training datasets has the detrimental effect of degrading the performance of the models or creating vulnerabilities which can be exploited. The scale at which AppLovin is processing data, daily handling over billions of events, is making it more difficult to ensure comprehensive data validation while maintaining the real-time processing needs. The most serious of the risks that are created through overfitting is the one that comes from the models completely specializing in what has been done historically, thereby rendering the generalization capacities for new market conditions or user behaviors very weak. The high focus on the gaming vertical that has led to a competitive advantage could be detrimental if the gaming industry undergoes a drastic change. Valuation The forward P/E ratios for AppLovin portray impressive earnings acceleration with the non-GAAP P/E declining from 45.93x (FY1) to 27.69x (FY3), which suggests an impressive earnings increase, outstripping all but one peer company. It is the market's strong response that makes the compression evident, showing that it appreciates AppLovin's ability to grow the business while also keeping profitability up. The company's PEG ratios of 0.94 (non-GAAP forward) and 0.31 (GAAP TTM) are at a high level with respect to the growth rates making the stock very attractive, at least, it is significantly more attractive than peers like Adobe (1.35) and Cadence (3.09). This fact shows that the value of AppLovin is off the charts due to its markdown price based on its growth potential, which is further elaborated by the large upside that is now available. In contrast to industry rivals, AppLovin's valuation metrics look realistic even if the absolute P/E ratios are higher. Adobe and Cadence declare lesser P/E compression over time, while AppLovin shows signs of higher earnings growth. The absence of profit for a company like MasterCard (negative P/Es) contrasts sharply with AppLovin's prevailing profits in the ad-tech sector. Guru Holdings Lowenstein's 17.19% stake which is equivalent to $762.85 million shows tremendous conviction, especially if we take into consideration the average buy price that he had of $75.06, which is representing a 423.6% gain. Lowenstein's convincing position, which is large in size and yields excellent returns, is an evidence of AppLovin's strategic execution and its growth path. The 12.86% increase in the holdings that Lowenstein took just lately proves that he still has confidence in the company despite the stock's larger rise, which in turn shows that the bottom line is the company's fundamentals rather than the ups and downs of the market. Resnick's 13.47% stake ($740.26M) with an average cost basis of $49.41 (695.4% gain) represents even earlier conviction in AppLovin's transformation story. The stability of his holdings (0% recent change) indicates dissatisfaction with current positioning while maintaining long-term conviction. Both managers' five-star ratings and substantial outperformance demonstrate their investment expertise. ConclusionAppLovin faces strong competition from technology companies like Google, Facebook, and Apple. Google's AdMob platform and Ads ecosystem, coupled with its interconnectedness with Android, YouTube, and its advertising network, offer premium exposure and fine contracts. Facebook's Audience Network and vast data from social media enable precise user targeting and cross-platform campaign management. Apple's recent privacy policies, App Tracking Transparency (ATT), provide mixed-source benefits in the competition scene, but may limit data advantages. To address this threat, AppLovin focuses on mobile gaming and app monetization areas, offering tailored solutions rather than generic ad solvers. The AXON platform's automatic algorithms for the mobile app environment often result in better performance than generic ad solvers in terms of user quality and monetization efficiency. This article first appeared on GuruFocus. Sign in to access your portfolio
