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Thursday, Piper Sandler’s analysts increased their price target on AppLovin Corp (NASDAQ:APP) shares to $455 from $425, while keeping an Overweight rating on the stock. The adjustment came after the company posted robust first-quarter results and provided an encouraging second-quarter guide, which led to a share price surge of over 10% in after-hours trading. According to InvestingPro data, AppLovin, now valued at over $102 billion, has delivered an impressive 310% return over the past year. With analyst targets ranging from $200 to $650, the stock continues to attract attention from Wall Street.
The analysts highlighted AppLovin’s sustained performance across both gaming and non-gaming sectors. They pointed out two significant upcoming catalysts that could further propel the company’s growth: the testing of a self-serve platform in the second quarter and an international launch. Additionally, the divestiture of the lower-margin Apps segment is expected to streamline the company’s narrative. InvestingPro data reveals strong fundamentals, with a 43.44% revenue growth and a robust gross profit margin of 75.22%. The company maintains an "GREAT" Financial Health score, suggesting solid operational efficiency.
The research firm remains confident in AppLovin’s ability to maintain its momentum and foresees multiple years of revenue growth driven by new verticals. Piper Sandler’s analysis includes insights into their pixel work, a bullish stance on E-Commerce, and AppLovin’s share of the supply-side market.
The analysts’ statement emphasized the company’s continuous execution and their belief in the potential for significant revenue tailwinds. Based on these higher estimates and the strategic move to offload the Apps division, the firm has raised their price target. Piper Sandler reaffirmed their Overweight rating, signaling their positive outlook on AppLovin’s stock performance.
In other recent news, AppLovin Corp reported impressive financial results for the first quarter of 2025, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $1.67, surpassing the forecast of $1.43, and reported revenue of $1.48 billion, which was higher than the anticipated $1.38 billion. This strong performance was highlighted by a 40% year-over-year increase in revenue and an 83% rise in adjusted EBITDA. In addition to these results, AppLovin’s advertising segment saw significant growth, with a notable 81% adjusted EBITDA margin, driven by both gaming and non-gaming sectors.
Analysts have responded to these developments with varied adjustments to AppLovin’s stock price target. Oppenheimer reduced its price target to $500 while maintaining an Outperform rating, emphasizing the company’s ability to address macroeconomic challenges. BTIG increased its target to $471, citing the company’s strong first-quarter results and potential for growth through its self-serve platform. Goldman Sachs raised its target to $435, maintaining a Neutral rating but acknowledging the company’s strong margins and growth potential. Jefferies expressed optimism by increasing the target to $530, highlighting AppLovin’s significant advertising revenue growth and potential market expansion.
These recent developments underscore AppLovin’s strategic focus on expanding its non-gaming advertising revenue and deploying its self-serve portal to broaden its advertiser base. The company’s management remains optimistic about its growth trajectory, with plans to enhance its AI-driven advertising solutions and expand its web advertising capabilities.
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