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Investing.com - UBS raised its price target on AppLovin Corp (NASDAQ:APP) to $840.00 from $810.00 while maintaining a Buy rating on the stock. AppLovin, currently trading at $617.05, has shown remarkable performance with a 266% return over the past year, according to InvestingPro data.
The firm increased its fiscal year 2026 EBITDA estimate by 3.4% to $6.48 billion, compared to the Street consensus of $6.2 billion, citing potential upside in gaming estimates and better-than-expected EBITDA margins in the third and fourth quarters. This optimism aligns with AppLovin’s impressive 78.61% gross profit margin and strong revenue growth of 78.91% over the last twelve months.
UBS views AppLovin’s fourth-quarter revenue guidance as "adequately conservative," noting potential upside from additional web-based and gaming model improvements, along with more web-based advertiser onboarding through the remainder of the fourth quarter.
The high end of AppLovin’s revenue guidance ($1.6 billion, representing 13.9% quarter-over-quarter growth) includes approximately $250 million from web-based revenue, which aligns with UBS’s prior expectations.
UBS reiterated its Buy rating, stating that AppLovin remains on track to deliver a multi-quarter revenue ramp with near-term catalysts, an attractive risk/reward at 2.2x, and potential valuation upside with a forward price-to-earnings ratio of 32x for fiscal year 2027 estimates versus a three-year earnings per share compound annual growth rate of 38%.
In other recent news, AppLovin Corp reported third-quarter results that exceeded expectations, driven by improvements in its advertising model and gaming business. The company achieved a 12% revenue growth quarter-over-quarter, surpassing estimates from BofA Securities and company guidance. BofA Securities maintained its Buy rating on AppLovin, with a price target of $860, citing incremental gaming model improvements. RBC Capital also raised its price target to $750, maintaining an Outperform rating, and praised the company’s consistent execution in its gaming business. BTIG increased its price target to $705, highlighting a significant uptick in non-gaming revenue and healthy growth in gaming. Meanwhile, Goldman Sachs raised its price target to $720, maintaining a Neutral rating, and noted the strong advertising revenue driven by AppLovin’s AXON 2.0 platform. Needham maintained a Hold rating on the company, acknowledging the better-than-expected performance in its core mobile gaming advertising revenue. These developments reflect a positive outlook from multiple analyst firms following AppLovin’s recent quarterly performance.
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