An 8-Day Losing Streak Has AppLovin Stock Down 15%
AppLovin (APP) stock is on an 8-day losing streak, down 14.8% since the run began. That erased about $16.4 billion from the company’s market value, which now stands at about $94.5 billion. The stock closed at $281.31 on Thursday, October 1, its lowest close of the past year.
How The Streak Stacks Up Against The S&P 500
Returns for APP and the S&P 500 over the streak and the periods around it, all ending Thursday, October 1 and including dividends:
| Return Period | APP | S&P 500 |
|---|---|---|
| 1 Day | -3.1% | 0.2% |
| 8 Days (Current Streak) | -14.8% | -1.2% |
| 1 Month (21 Trading Days) | -9.8% | 0.6% |
| 3 Months (63 Trading Days) | -46.6% | 2.7% |
| Year To Date | -58.3% | 13.0% |
| 1 Year (252 Trading Days) | -60.8% | 16.0% |
How The Streak Compares With The Market
The market explains little of this: the S&P 500 lost 1.2% over the same 8 sessions, including dividends, against AppLovin’s -14.8%. 2 other S&P 500 stocks are currently on losing streaks of 8 days or longer. Over the past three months the stock is down 46.6%, a window that includes the streak; over the other 55 sessions of that window it was down 37.4%.
Is The Business As Weak As The Stock?
On the fundamentals, revenue grew 60.6% over the last twelve months, against a median of 6.8% for S&P 500 Communication Services stocks; its operating margin is 77.4%, versus a median of 20.1%; and the stock trades at 21.4 times trailing earnings against a median of 20.7. The read is mixed.
If the drop has you weighing an entry, resist buying on price alone. Our Buy the Dip screen ranks the marked-down names where growth and cash generation still hold up.
Prefer the theme to the single name? A communication services ETF like XLC holds the whole group, not just this stock. It is still a concentrated bet on one theme, which is the gap the portfolio below is built to close.
Weakness In One Name Should Be Noise, Not News
For a diversified holder, a streak like this is a data point. For a concentrated one, it is a hole in the plan. The difference is never the stock; it is the portfolio built around it.
Building that portfolio is what the Trefis High Quality (HQ) Portfolio does: roughly 30 businesses with the cash generation and balance-sheet strength to absorb a bad month, selected and rebalanced by rules. It has a track record of outpacing a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000. Make the next streak, in either direction, someone else’s drama.