Why AppLovin's stock price jumped 16% in the last month

According to Standard & Poor's Global Market Intelligence( S&P Global Market Intelligence )Provides data, application discovery and monetization companiesAppLovin (NASDAQ resonance stock code: APP)The stock price of AppLovin has risen by 15.9% in the month of March. there does not appear to be a single catalyst for this growth. However, some developments can be viewed in a positive light, as the aggregate sentiment of AppLovin stock is on the rise.

For example, earlier this month, Adjust, an AppLovin company, announced that it would be providing a new service forAlphabet A new feature is available for apps in its Google Play store. Developers can now measure marketing campaigns across platforms, including PCs, a technology that Adjust says is a "first of its kind" and demonstrates how AppLovin is pushing the envelope for its customers.

I'm not saying that Adjust's news is the reason for AppLovin's stock price increase. I'm just saying that investors are encouraged by AppLovin's growth in recent quarters. And that's just another excuse for already-encouraged investors to find more reasons to be optimistic.

In fact, AppLovin released its 2023 financials in February, and that report has been a big source of recent optimism. The company is focused on its application software business, which saw year-over-year revenue growth of $76% last year, and this high-margin revenue growth resulted in full-year net income of $357 million, a rare level of profitability for a high-growth tech company.

Use profits for March

As AppLovin's software business surged, so did the company's profits, improving the company's overall financial position. At the end of the year, the company had more than $500 million in cash and cash equivalents and is on track to generate more than $1 billion in free cash flow by 2023. Management took advantage of this favorable position to help shareholders in March.

It turns out that investment companiesKKRAppLovin, which owns nearly 20 million shares of stock, has decided to sell. The news was released on February 29th. The influx of so many shares into the market could have had a negative impact on the stock price. However, with KKR's sale, AppLovin's management decided to buy another US$570 million in shares, thus minimizing the negative impact.

This is a continuation of what AppLovin has been doing for the past year. 2023, Koon purchased over 54 million shares of stock, reducing the stock count by 10%.

What's next for AppLovin?

Apparently, AppLovin has made great strides in providing software solutions to mobile app developers. The company expects to realize a net profit growth of nearly 35% in the upcoming first quarter of 2024, which is good.

As the company strengthens its position in the mobile app ecosystem, AppLovin is reaching out to similar markets. For example, it owns a CTV advertising company called Wurl. In March, Wurl launched a new product that ensures ads match CTV programming.

CTV is a hot growth market, and this is just one way for AppLovin to keep its revenues growing for years to come. If current conditions continue, March won't be the last good month for AppLovin stock.

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Alphabet executive Suzanne Frey is a member of The Motley Fool's board of directors.Jon Quast has no position in any of the stocks mentioned above.The Motley Fool has holdings in recommended Alphabet and KKR.The Motley Fool has a disclosure policy.

Why AppLovin Shares Surging in the Last Month 16% was originally published by The Motley Fool.