AppLovin (NASDAQ:APP) is scheduled to announce its earnings on Wednesday, May 7, 2025. In the past five years, APP stock has recorded a positive one-day return after its earnings announcements in a notable 69% of cases. These positive returns have varied significantly, presenting a median of 24% and a peak of 46%, which underscores the considerable volatility typically linked with APP stock surrounding its earnings periods.
For traders focusing on events, examining these historical trends could provide a tactical edge, though the actual market reaction will largely rely on how the reported figures stack up against consensus forecasts and market anticipations. There are two primary strategies to leverage this historical information:
- Pre-Earnings Strategy: Evaluate the historical likelihood of a positive post-earnings return and take a position before the earnings announcement.
- Post-Earnings Strategy: Investigate the historical relationship between the immediate market reaction to earnings and the following medium-term returns, then adjust your position as needed after the earnings release.
At present, consensus forecasts estimate APP’s earnings per share at $1.96 with revenues of $1.38 billion. In comparison, the company reported earnings per share of $0.92 with revenues of $1.06 billion in the equivalent period last year.
From a fundamental perspective, APP currently boasts a market capitalization of $104 billion. Its revenue for the last twelve months was $4.7 billion, and the company has shown operational profitability with $1.9 billion in operating profits and a net income of $1.6 billion.
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AppLovin Stock Historical Odds Of Positive Post-Earnings Return
Here are some insights regarding one-day (1D) post-earnings returns:
- There are 16 earnings data points gathered over the past five years, with 11 positive and 5 negative one-day (1D) returns noted. In summary, positive 1D returns occurred around 69% of the time.
- This percentage notably rises to 83% if we analyze data from the last 3 years instead of 5.
- Median of the 11 positive returns = 24%, while the median of the 5 negative returns = -4.6%
Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns following earnings is compiled along with the statistics in the table below.
AppLovin Stock Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (though it is not effective if the correlation is low) involves understanding the relationship between short-term and medium-term returns after earnings. Identify a pair demonstrating the highest correlation and perform the necessary trade. For instance, if 1D and 5D have the highest correlation, a trader could take a “long” position for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on 5-year and 3-year (most recent) history. Note that the correlation 1D_5D pertains to the relationship between 1D post-earnings returns and corresponding subsequent 5D returns.
Is There Any Correlation With Peer Earnings?
Occasionally, the performance of peers may influence the stock reaction following earnings. In fact, pricing may begin to be factored in before the earnings are revealed. Below is some historical data comparing the post-earnings performance of AppLovin stock with the stock performance of its peers that reported earnings immediately prior to AppLovin. For an equitable comparison, peer stock returns also reflect post-earnings one-day (1D) returns.
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